Texas Department of Insurance
A Review of the Insurance Fraud Regulatory Function at the Texas Department of Insurance
Report Number 95-117
The Texas Department of Insurance has not clearly defined the role of fraud detection and referral in relation to its other regulatory responsibilities. Organizational instability has created uncertainty, and funding for the fraud regulatory function has been decreasing.
The Department has shown some signs of improvement since 1992. An infrastructure is in place to facilitate the detection, investigation, and referral of fraud committed while engaging in the business of insurance. Fraud-related performance measures, compiled by the Department, generally show an increase in activity from fiscal year 1993 to 1994.
While the Department's performance measures provide an indication of its performance in fraud detection and reporting, inconsistencies were noted with some of the figures. In addition, there has been little evaluation of the quality or outcome of fraud-related activities.
While the infrastructure exists, it has not been implemented effectively. For example, existing information systems are not used effectively in the detection and referral of potential fraud. In addition, policies and procedures are not consistently implemented.
Relations with other agencies and law enforcement authorities are generally good. However, relations with the Travis County District Attorney's Office could be improved.
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