Fraud a top priority for insurance commissioner

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North Carolina Insurance Commissioner Mike Causey said fighting insurance crime will be a top priority in his administration.

“Insurance fraud adds 10 to 15 percent to the cost of our insurance,” Causey told 50 Wilson business leaders and insurance executives at Tuesday’s “A Closer Look” luncheon hosted by the Wilson Chamber of Commerce.

Causey said the North Carolina Department of Insurance receives between 400 and 500 complaints from insurers each month and there is not enough staff to investigate them all.

“We are so short-handed right now we have to go through to pick the very worst ones and we are able to investigate 5 to 8 percent of those,” Causey said.

The department has 22 sworn law enforcement officers who are on the same level as agents in the State Bureau of Investigation.

Causey said he is seeking more funding so he can hire additional criminal investigators to handle more cases.

“Every week you read about somebody we have arrested for insurance fraud for burning up their own vehicles or this sort of thing,” said Causey. “We have got one case we are working on now here in eastern North Carolina that is a $28 million Medicaid fraud case. They tell me that is a small case when it comes to Medicaid fraud.”

According to Causey, one of the larger problems is shysters who prey on victims after extreme weather events like hurricanes.

“There is a lot of fraud in the construction industry, especially with these out-of-state folks that come in after a hurricane or hail damage and they will go knock on doors and say ‘We had to fix your neighbor’s roof. Let us check your roof. There might be some damage.’ And they go up on you roof and there’s not a problem in the world with your roof, but they create a problem by taking a little screwdriver or something and jimmying up the shingles or punching a hole in your roof,” Causey said. “They take a picture and say ‘You’ve got damage, but don’t you worry, it won’t cost you a dime. We can file it with the insurance companies.’”

Causey is a former insurance agency owner and is the first-ever Republican to hold the office of state insurance commissioner. He took office in January.

“I used to work Wilson quite a bit when I was superintendent of agencies for Standard Life Insurance Co.,” said Causey. “I had all of North and South Carolina. Some of our best production came out of Wilson County and Pitt County and eastern North Carolina and I love this part of the state.”

Causey said he was amazed to learn that the Department of Insurance does more than just regulate insurance companies, agents and policies. Causey is also the state fire marshal, the chief building inspector in the state and he governs collection agencies, bail bondsmen, manufactured housing, health insurance, travel clubs and motor clubs, among other things.

There are 28 boards and commissions and 28 divisions within the department.

Causey said that working with the U.S. Congress on a replacement for the Affordable Care Act has been a focus from day one.

Senior Deputy Insurance Commissioner Michelle Osborne was brought up to answer specific questions on the ACA, also known as Obamacare. President Donald Trump and Republican congressional leaders have said they want to repeal the ACA.

Osborne said that Causey is creating a task force of insurers, insurance agents and consumers to come together and give different perspectives on the ACA.

“When we first arrived at the department, we were shocked to find out that North Carolina was one of the top five states that was taking a lot of money from Obamacare for subsidies,” Osborne said.

Osborne said North Carolina is losing money on health care because of higher loss ratios.

“No. 1 is the demographics. We have a lot of elderly,” Osborne said. “No. 2 is the food that we eat and that kind of thing, the health issues. But the other thing is the cost. The cost of health care in our state is really high.”

“Does anybody know the ratio of cost between the community hospital versus when Duke or UNC-Chapel Hill purchased them?” Osborne asked. “It goes from 1.02 to 1.10. So the cost is another factor. The insurance companies have a hard time with the health insurance industry because of the cost.”

Osborne could not say definitively whether any replacements for the ACA would include an offer for parents to keep their children on their policies up to age 26, or if pre-existing conditions would be covered.

“We hope so,” Osborne said. “We hope that we will allow for more options and more coverages. As far as pre-existing condition, I can’t answer that because its going to come up from the feds.”

Replacing the Affordable Care Act may be harder than originally thought, Causey said.

“It’s not an easy fix, as they are finding out,” Causey said.

dwilson@wilsontimes.com | 265-7818