Phillips & Cohen LLP whistleblower lawyers Colette Matzzie and Peter Budetti recently co-wrote an article encouraging insurers to use state qui tam laws in California and Illinois to recover funds stolen through fraud.
Matzzie and Budetti also argue that insurers should encourage other states to adopt similar laws based on the federal False Claims Act.
The article is published in the Journal of Insurance Fraud of America, and can be found in its entirety here.
You can read the abstract below:
Insurance companies may find it in their interest to use state qui tam laws in California and Illinois to file whistleblower lawsuits and recover funds stolen through fraud. Whistleblower lawsuits in those states allow private insurers to a) recover amounts well beyond actual losses, plus reasonable attorney fees, expenses and costs; b) mobilize the resources of the state and private bar to prosecute the suits; and c) obtain equitable relief of longterm value to the insurer. The statutes reach a wide range of insurance schemes, including automobile, workers compensation, property and healthcare. Several insurers, notably Allstate, have used the statutes to remedy fraud schemes. Many states have enacted qui tam laws. But only California and Illinois have separate statutes allowing private insurers recovery of fraud losses on behalf of the state. It would be in private insurers’ interests to encourage other states to adopt similar laws.