SB3 Summary

• Creates Chapter 12A of Title 27 to define and establish criminal penalties for insurance fraud committed by any person, insurer, reinsurer, broker, or their agents.

• Establishes the Insurance Fraud Unit within the Department of Insurance with authority to investigate suspected fraud, issue subpoenas, execute arrest warrants, and refer cases to the Attorney General.

• Imposes $200 annual assessment on each insurer authorized in Alabama to fund the Insurance Fraud Unit, appropriating $320,000 for fiscal years 2010 and 2011.

• Creates three degrees of insurance fraud as criminal offenses: first degree (loss exceeds $1,000, Class B felony), second degree (loss not exceeding $1,000, Class C felony), and third degree (unlicensed business transaction, Class A misdemeanor).

• Provides civil immunity for persons reporting suspected fraud and requires fraud warnings on insurance documents, mandatory reporting by insurers, and confidentiality of investigation records.