Tribune Editors Note: Last week, a spokesman for the Arizona auto insurance industry used this space to contend that premium rates are falling because of the industries zealous crusade against inflated medical bills and fraud. The Tribune invited comments from the opposite viewpoint. This week, Dr. Alan Immerman, president of Independent Chiropractic Physicians, responds to that invitation.)

For years the focus has been on insurance fraud perpetrated by claimants. The pendulum has now swung so far in the other direction that it is imperative we focus on insurance fraud perpetrated by insurance companies.

Insurers commonly hire doctors to review the treatment given to automobile accident victims. Greed has driven the insurers to fix the system so that the opinions from their bought-and-paid-for doctors are always pro-insurance company.

An Idaho judge recently upheld a $9.5 million punitive damage award against State Farm (Cindy Robinson v. State Farm, Case No. CV OC 94-98099D, 8/07/98), concluding that State Farm had a national policy of manufacturing fictitious reports and obtaining biased opinions under the guise of obtaining independent and objective medical reviews. State Farm knew these evaluation processes were tainted and not objective. The only conclusion to be drawn from this was that State Farm intended by these processes to reduce the amount of money it would have to pay on legitimate claims submitted by its insureds.

Some insurers pay bonuses (bribes?) to encourage claims personnel to intentionally underpay the fair value of claims. A judge recently upheld a $25 million punitive damage award against State Farm in Utah (Campbell v. State Farm, Civil No. 890905231, 8/03/98) and concluded that State Farms national claims review program is an unlawful scheme to provide undisclosed incentives to adjusters to deny benefits owed consumers by paying out less than fair value in order to meet preset, arbitrary payout targets designed to enhance corporate profits. Legislation to outlaw such improper incentives was opposed by State Farm in the Arizona Senate earlier this year.

Other insurance companies engage in mad dog defense tactics, making litigation so traumatic for claimants that they just give up. Consider a judge's order from Pinal County Superior Court (Crackel and Guenther v. Allstate, Case No. CV 97044439):

Procedurally the outline of the case (presented by Allstate lawyers) has appeared to be a war of attrition rather than any reasonable attempt to discuss the merits of the case. . . In short, Defendants (Allstate) made clear that it was their intent to derail the court's directive to appear and participate in good faith negotiations and settlement nearly immediately after the Judge's order calling for such conference. . . no effort has been made to participate in good faith . . .

Insurance companies argue that no one can be injured in an automobile accident when there is little or no vehicle damage. They largely base their position on research performed in Texas funded by the insurance industry ($7 million from State Farm alone from 1990-1997). Research institute employees were used as the research subjects leading to obvious bias. This research has never been published in any peer reviewed medical journal but insurance company attorneys constantly parade it through the courtroom to prove that a claimant could not have been injured.

When a vehicle is rear-ended and does not crush, the vehicle does not absorb the forces of the impact. Therefore, the forces are left to injure the occupants. The less the vehicle is damaged, the more likely it is that the occupant is injured. A Society of Automotive Engineers publication (#970494, 1997) concluded:

A common misconception formulated is that the amount of vehicle crash damage due to a collision offers a direct correlation to the degree of occupant injury. This paper explores this concept and explains why it is false reasoning . . . minor vehicle damage can relate or even be the major contributing factor to occupant injury.

It is clearly false to argue that low property damage means no occupant injury. Yet the insurers spend millions of dollars every year making this argument in the courtroom. They combine this with a media campaign which casts suspicion on almost all claimants. The result is a large number of zero dollar verdicts.

Insurance company fraud cries out for attention. Legislation being considered would make it unlawful for insurance companies to:

1. Force or encourage claims personnel to challenge and resist reasonable claims of insureds and claimants in order to obtain an increase in salary or an advance in position from the personnel's employer. Legislation to outlaw such improper behavior was opposed by State Farm in the Arizona Senate earlier this year.

2. Refuse to pay claims or reduce the amount paid on claims by relying on injury causation defenses that are not shown to be widely accepted by the scientific community.

3. Make biased or unfair decisions or use a claims review organization, adjuster or physician that makes biased or unfair decisions.

4. Refuse to pay claims for reasonable and necessary services provided to an insured or claimant by a treating physician if, after the physician examines the insured or claimant, the treating physician determines that the insureds or claimants injury was caused by the at-fault party in the accident.

Is there anyone who believes that insurance companies should be free to use bonuses and promotions to encourage claims personnel to resist reasonable claims? It there anyone who thinks that insurance companies should be permitted to harass claimants by using technical arguments that are not widely accepted in the scientific community? It is right for insurers to make biased or unfair decisions? Is it wrong to require that doctors and not insurance company engineers decide if a patient is truly injured?

The trial lawyers have not been involved in conceiving or drafting the proposed legislation. The impetus has come from leading legislators such as House Banking and Insurance Committee Chairman Debra Brimhall. Let's quit focusing on the trial lawyer as the great bogeyman. There are a lot of people in this state other than lawyers who are appalled when insurance companies cheat claimants.

Claimant fraud has received a lot of attention in recent years. The time has come to turn our attention to insurance company fraud. Learn the facts so that you can make an informed decision.