Date: July 21, 2004
For more information contact: Eileen Mallow, Assistant Deputy Commissioner, (608) 266-7843 or eileen.mallow@wisconsin.gov

Public Service Announcement by Jorge Gomez

Wisconsin Fights Fake Insurance

Commissioner Gomez wants consumers to "Stop. Call. Confirm."
. . .Frank W. Abagnale of "Catch Me If You Can" serves as national spokesperson

Madison, WI--Nobody likes to be scammed. But, unfortunately, fake insurance policies are on the rise in every line of insurance, with Wisconsin consumers footing the bills in unpaid claims.

In the last several years fake insurers under names such as "Employers Mutual," "TRG" and "Local 16" have attempted to do business in Wisconsin. These schemes falsely claimed to be affiliated with well known insurers, to be "self-funded employer plans," or "union plans." They sold coverage to people desperate for affordable health insurance. Their low premium was "too good to be true."

As part of the state's fight against the rise in fake insurance, Commissioner of Insurance Jorge Gomez announced the launch of an awareness campaign that encourages consumers to "Stop. Call. Confirm." before buying insurance.

Frank W. Abagnale, the retired master forger whose story was told in the movie "Catch Me If You Can," serves as national spokesperson for the campaign and appears in television and radio public service announcements.

"In the area of health insurance alone, the General Accounting Office reported 144 fake insurers nationwide sold bogus policies to more than 200,000 policyholders between 2000 and 2002, resulting in $252 million in unpaid claims," said Commissioner Gomez. "It is important that the insurance department and consumers continue to work together to send a message to fake insurers that their practices have no place in Wisconsin. Our state has been a national leader in identifying and taking action against these illegal plans and we will continue to remain vigilant so Wisconsin consumers do not become victimized."

According to Wisconsin law, with very few exceptions, no insurance product can be sold by individual agents, brokers or companies without the approval of the Office of the Commissioner of Insurance (OCI). Fake insurance is any insurance plan that is intended to defraud consumers or businesses.

Everyone is at risk
"Fake insurance can touch anyone at any time with potentially disastrous results," said Abagnale, who now consults with the FBI and top businesses on fraud prevention. "Frequent targets of unauthorized health insurance plans are older adults and small businesses or associations looking to reduce health insurance costs."

Fake insurance can be attractive because it's typically less expensive than legal policies. But that's because a fake policy does not provide sufficient--if any--coverage. As a result of fake insurance policies, honest people and businesses are swindled, health is endangered, premiums stay high, and goods and services cost more.

Protecting yourself is easy
Consumers who are not absolutely sure if they are dealing with a reputable, licensed insurance provider should look for these three warning signs of fake insurance:

• Aggressive marketing and a high-pressure, "you must sign today," sales approach with lots of fine print and disclaimers.
• Premiums and prices that are too good to be true compared to other products in the marketplace.
• An agent or association selling a purported "union plan," "employer" or "ERISA" plan. True "union" and "employer" plans are not "sold" by agents or associations.

So, how can you protect yourself against fake insurance? The new campaign from OCI and the National Association of Insurance Commissioners urges you to STOP . . . CALL . . . and CONFIRM before you buy insurance:

• STOP before signing anything or writing a check.
• CALL the OCI at 1-800-236-8517.
• CONFIRM if the company is legitimate and licensed to do business in Wisconsin. Licensed insurers are listed on OCI's Web site.

"If consumers stop, call, and confirm before they buy insurance, they may save themselves the pain of unpaid claims," Gomez said. "Consumers can also help us track down and take action against the con artists who sell fake insurance. I encourage anyone who feels they have been the victim of an insurance scam to contact our office and file a complaint."

Complaint forms may be downloaded from OCI's Web site, http://oci.wi.gov. To help Wisconsin residents make informed buying decisions, OCI also publishes over 30 consumer guides to insurance. The publications are available for download from http://oci.wi.gov, and hard copies are also available upon request.

Created by the legislature in 1871, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI's mission is to lead the way in informing and protecting the public and responding to its insurance needs.