Senate committee advances insurance fraud bill

Senate committee advances insurance fraud bill February 11, 2025

Sen. Rick Girdler, R-Somerset, testifies on Senate Bill 24 during Tuesday’s Senate Banking and Insurance Committee meeting. The measure seeks to curtail property and casualty insurance fraud in Kentucky. A high-resolution photo can be found here.

FRANKFORT — A measure to help tackle insurance fraud in Kentucky – Senate Bill 24 – gained unanimous approval Tuesday from legislators on the Senate Banking and Insurance Committee.

The legislation would expand the definition of property and casualty insurance fraud to help crack down on nefarious contractors and public adjusters who charge unnecessary or fraudulent fees or who surprise consumers with exorbitant charges, supporters testified.

Sen. Rick Girdler, R-Somerset, is sponsoring the bill. He said it doesn’t deal with insurance claims related to bodily injury, only property and casualty insurance. The proposed changes would add more teeth to the law, he said.

“You have to prosecute these people,” Girdler said. “If you don’t prosecute them, we’re in trouble.”

Eric DeCampos of the National Insurance Crime Bureau testified that the bill would provide law enforcement personnel with additional tools to investigate insurance fraud and close loopholes in state laws that are being exploited by fraudsters.

Chris Nolan, testifying on behalf of the Insurance Institute of Kentucky, told committee members that Kentuckians are familiar with storms and catastrophes that have become common. He said the events give unscrupulous people opportunities to commit insurance fraud and prey upon already vulnerable consumers.

“As many of you already know, property and casualty insurance fraud is not a victimless crime. It’s estimated that the cost to a single family each year is between $400 and $700 in increased premiums due to insurance fraud,” he said.

Nolan said most contractors and adjustors do a great job in providing services to help people rebuild, but some contractors and public adjusters charge unnecessary, exorbitant, or fraudulent fees to inflate insurance claims.

Sen. Brandon J. Storm, R-London, asked those testifying about insurance fraud enforcement.

“Is this an issue that commonwealth’s attorneys across the commonwealth are not prosecuting insurance fraud,” he asked. “Because if that’s the case, can you show me a commonwealth’s attorney in Kentucky that’s not doing their job as it relates to insurance fraud enforcement?

Nolan said an insurance fraud task force meets quarterly, and Department of Insurance investigators update stakeholders regarding the millions of dollars they recover from fraud. Additionally, officials of the DOI have been referring cases to the Kentucky attorney general for prosecution.

Senate Minority Whip David Yates, D-Louisville, said he can support the bill because it clarifies criminal intent.

“I appreciate your willingness to work with this bill to make sure that it’s narrowly tailored and actually goes to making sure that someone has criminal intent,” he said.

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https://apps.legislature.ky.gov/publicservices/pio/release.html#SB24021125