New Law Makes Alabama Criminal Insurance Fraud A Felony
A new law put in place by the Alabama legislature makes Alabama criminal insurance fraud a felony. The new law takes effect on August 1st 2013. The law also establishes an enforcement division which will be funded by a tax on insurance companies.
In the past, Alabama criminal insurance fraud was prosecuted under a number of crimes such as theft, attempted theft, arson, or theft by deception. The new law defines Alabama criminal insurance fraud in which the loss or potential loss exceeds $1,000.00 as a Class B Felony, punishable by 2 to 20 years in prison. Loss or potential loss less than $1,000.00 is a Class C felony which carries a penalty of up to 10 years in prison.
The law also makes it a misdemeanor to transact insurance without a license. People convicted of Alabama criminal insurance fraud are also barred from working in the insurance business anywhere in Alabama.
The law punishes insurance companies who engage in fraud with the revocation of their license and a potential money penalty.
