HomeMy WebLinkAboutMINUTES - 08101993 - 1.39 'To:, BOARD OF SUPERVISORS 1 -3 9 Contra
Costa = =
From:
Gary T. Yancey, District Attorney
County ,. `
Date: July 14, 1993
Subject: Approval for Submission and Execution of a Contract With the State of California,
Department of Insurance, for the Purpose of Combatting Automobile Insurance
Fraud for the Period July 1, 1993 through June 30, 1994
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) &BACKGROUND AND JUSTIFICATION
I. RECOMMENDED ACTION
Authorize the District Attorney to submit an application and execute a grant award
contract, including any extensions and amendments thereto, with the State of
California Department of Insurance for funding of the prosecution of automobile
insurance fraud for the period July 1, 1993 through June 30, 1994, in the amount of
$228,299.
II. FINANCIAL IMPACT
None.
The grant application in the amount of$228,299 will fund the salary and benefits for
an attorney, investigator, and one-half clerk assigned to the program. The
automobile insurancefraud award is allocated from a trustfund financed by a current
assessment of $1.00 per insured vehicle payable by the insurer. Of this amount,
approximately one-half is earmarked for distribution todistrict attorneys for enhanced
prosecution of automobile insurance fraud. Supplantation is prohibited.
Revenue in the amount of $166,631 is built into the District Attorney's 1993/94
budget to fund the program with partial investigative support. If the requested
funding is approved by the State, budget and position adjustments will be submitted
to the Board for action, as appropriate.
III. gEASONS FOR RECOMMENDATION/BACKGROUND
The Legislature has determined that one of the significant factors driving up the
costs of auto insurance is fraud. While fraud is recognized as a growing problem
across the country, California is an area of concentrated criminal activity in insurance
fraud. While originally the problem was confined to the Los Angeles area, recent
statistics confirm that the problem is rapidly becoming a statewide problem.
The Department of Insurance Fraud Bureau was established in 1979. However,
resources committed to fighting fraud were limited. In 1989,the Legislature enacted,
through SB 2344 and subsequently through SB 1103 in 1990,to enhance resources
for auto insurance fraud investigation and prosecution through a per vehicle
surcharge in California. That investment has resulted in dramatically increasing the
Continued on Attachment: X Yes Signature:
_Recommendation of County Administrator _Rec mm ndation of Board Committee
_Approve Oth
Si nat res :
Action of Board on Alin. 1 o M.1 Approved as Recommended _gC Other
Vote of Supervisors I hereby certify that this is a true and correct copy of an action taken and
entered on the minutes of the Board of Supervisors on the date shown.
Ayes: Noes:
(Absententered
, ATTESTED:AUG 10 1993 199_
Absent: Abstain: Phil Batchelor, Clerk of the Board of Supervisors
and County Administrator
cc: District Attorney
County Administrator, ATTN: G.Roemer
Auditor-Controller
By: Deputy
number of prosecutions for auto insurance fraud statewide. In the past two years,
the number of suspected fraudulent claims referred to the Fraud Bureau has tripled.
Both the implementation of the newly mandated carrier-based special investigative
units to identify and report fraud and the Automobile Insurance Claims Depository
to receive and analyze claims for fraud will operate to uncover large numbers of
fraudulent claims which now go undetected.
From April 1989 through March 1992, the District Attorney filed nine (9) complaints
for an average of three (3) per year. During the first year of the Automobile
Insurance Fraud Program, the District Attorney filed ten (10) such cases. With the
increased investigation capabilities within the Department of Insurance, the
projection for FY93-94 is twice that amount, or twenty (20) cases.
IV. CONSEQUENCES OF NEGATIVE ACTION
Failure to approve this recommendation would result in the inability of the District
Attorney to apply for $228,299 in state funds designated for use by Contra Costa
County in the prosecution of automobile insurance fraud. A county which fails to
submit their application shall not be considered for funding, and their undistributed
funds shall be returned to the Department of Insurance fund to be reprogrammed.
AIF.RES/JUL93
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