Fiscal impact
reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for
standing finance committees of the NM Legislature. The LFC does not assume
responsibility for the accuracy of these reports if they are used for other
purposes.
Current FIRs (in
HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments,
whereas HTML versions may not.
Previously issued FIRs and attachments may also be obtained from the LFC
in
|
SPONSOR |
Stewart |
DATE TYPED |
|
HB |
346 |
||
|
SHORT
TITLE |
False Insurance Application Penalties |
SB |
|
||||
|
|
ANALYST |
Garcia |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY04 |
FY05 |
FY04 |
FY05 |
||
|
|
|
|
Minimal, See Narrative |
Recurring |
General
Fund |
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
Duplicates
SB 289.
LFC Files
Responses
Received From
Public
Regulation Commission, Insurance Fraud Bureau
Department
of Corrections
SUMMARY
Synopsis of Bill
The
bill will bring the penalties for false applications, claims, and proof of loss
into line with the penalties provided for larceny and fraud. The present
statute provides for a 4th degree felony regardless of the loss or
potential loss. The bill sets
fraudulent claims for insurance benefits where losses are less than $250 as a
petty misdemeanor or misdemeanor, which are presently felonies. The bill raises the felony level to third
degree from 4th degree for insurance fraud over $2.5 thousand and to
second degree from 4th degree for fraud over $20 thousand. The bill also makes the crime of conspiracies
as a third degree felony.
Significant Issues
1) The bill adds language to 59A-16-23 which
will impose an additional penalty on those employing others in an organized
insurance fraud ring, i.e. “staged accidents”.
2) The distinction of
lowering the level of crimes to petty misdemeanors or misdemeanors may result
in a slight decrease in persons incarcerated for insurance fraud. This number would be offset by longer sentences
for larger fraud.
FISCAL IMPLICATIONS
Since its inception in 1999, the Insurance Fraud
Bureau has convicted 30 to 40 individuals of various white-collar crimes. In a
state where the correctional system is overburdened with violent and drug
offenders, only a handful of these defendants have received actual
incarceration time. Therefore, it is expected that this bill will have a
minimal budgetary impact.
If the bill results in fewer persons
incarcerated for lower levels of insurance fraud, the fiscal impact of slightly
decreased numbers would be offset by the longer terms of incarceration and
resulting higher costs for persons committing fraud over $2.5 thousand.
The contract/private
prison annual costs of incarcerating an inmate based upon FY 03 actual expenditures
is $20,720 per year for males. The cost
per client to house a female inmate at a privately operated facility is $26,313
per year. Because state owned prisons
are essentially at capacity, any net increase in inmate population will be
housed at a contract/private facility.
The cost per client
in probation and parole for a standard supervision program is $1,452 per
year. The cost per client in intensive supervision
programs is $2,852 per year. The cost
per client in department-operated community corrections programs is $4,371 per
year. The cost per client in
privately-operated community corrections programs is $9,151 per year. The cost per year for male and female
residential community corrections programs is $20,725.
DG/lg:dm