ACT NO. 179
This act establishes the crime of insurance fraud and defines such fraud to be committed when a person, including a company, a corporation, and a government agency, intentionally conceals a material fact or makes a false representation in applying for insurance, making a claim for insurance benefits, or in the sale or solicitation of insurance. This means an insurance customer, insurance sales person, or an insurer can be prosecuted under this law. Penalties depend on the value of the benefit wrongfully obtained and include fines up to $20,000.00 and prison terms up to five years. Insurers and insurance professionals are immune from civil liability for good faith reports not made to further the insurance company's position with regard to a claim. The law does not apply to workers' compensation insurance.
In addition, the law requires insurance companies to prepare, implement, and maintain insurance anti-fraud plans. Plans must be designed to prevent, detect, and investigate fraud. The Department of Banking, Insurance, Securities, and Health Care Administration may require such plans to be filed with it. Such plans shall not be public records.
Effective Date: July 1, 2006, except the requirement to have an anti-fraud plan, which is effective January 1, 2007.
The Vermont General Assembly
115 State Street