New Jersey Section 2C:21-4.5 – Definitions relative to insurance fraud
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New Jersey Section 2C:21-4.5 – Definitions relative to insurance fraud
Insurance fraud is a serious issue that costs consumers and businesses in New Jersey millions of dollars each year in direct and indirect losses. To combat this problem, the state has enacted laws like Section 2C:21-4.5 which provides key definitions related to the crime of insurance fraud. Understanding these important terms is the first step to appreciating how insurance fraud is prosecuted in the state.
What is Insurance Fraud?
Insurance fraud refers to an intentional act of deceiving, misrepresenting or concealing information in order to obtain insurance benefits or avoid obligations. Common examples include:
- Submitting claims for injuries or damage that never occurred
- Lying on an insurance application to obtain lower premiums
- Staging accidents to file injury claims
- Exaggerating the value of stolen or damaged property
No matter the specifics, insurance fraud always involves providing false information with the intent of illegally obtaining money or other benefits from an insurance company.
Key Definitions in 2C:21-4.5
Section 2C:21-4.5 provides clear definitions of key terms related to the prosecution of insurance fraud in New Jersey:
Insurance Company
An “[insurance company](https://casetext.com/statute/new-jersey-statutes/title-2c-the-new-jersey-code-of-criminal-justice/chapter-2c21-forgery-and-related-offenses)” refers very broadly to any entity authorized to do insurance business in the state. This includes traditional insurance companies, self-insurers, reinsurers, health maintenance organizations and more. If an entity legally engages in any type of insurance activity regulated by New Jersey, it falls under this definition.
Insurance Transaction
An “[insurance transaction](https://law.justia.com/codes/new-jersey/2016/title-2c/section-2c-21-4.5)” encompasses any transaction between an insurance company and an insured, claimant, applicant, health care provider or other party who acts on their behalf. This covers the full range of interactions, from applying for insurance to submitting claims.
Statement
A “[statement](https://www.njcourts.gov/sites/default/files/charges/insfrd5.pdf)” includes any oral, written or electronic communication or representation. This makes clear that insurance fraud is not limited to written documents and claims, but also includes lies told over the phone or electronically.
Medical Record
Under the law, “[medical records](https://www.nj.gov/oag/insurancefraud/pdfs/insurance-fraud-text.pdf)” involve documentation relating to medical history, diagnosis, prognosis, treatment and care. Falsifying or concealing any such record constitutes insurance fraud.
Elements of Insurance Fraud
There are two main criminal statutes related to insurance fraud in New Jersey:
To be convicted under either law, the prosecution must prove certain elements beyond a reasonable doubt:
- The defendant knowingly [made, presented or caused to be made or presented](https://www.njcourts.gov/sites/default/files/charges/insfrd2.pdf) a false or misleading statement
- The statement was made in conjunction with an insurance transaction
- The defendant had intent to defraud
The key is that the false statement was intentionally made to deceive an insurance company for unlawful financial gain.
Defenses to Insurance Fraud
Some potential defenses to insurance fraud charges include:
- Lack of intent – The false statement was an innocent mistake rather than an intentional deception.
- No false statement – The alleged statement was technically true or accurate.
- First offense – The defendant has no prior insurance fraud convictions, which may lead to leniency.
- Cooperation – The defendant accepts responsibility and cooperates fully with the insurance company’s investigation.
- Restitution – The defendant agrees to repay all unlawful benefits received from the insurance company.
Proving intent to defraud is the key element for any insurance fraud conviction. An experienced criminal defense attorney can evaluate the prosecution’s evidence and identify defenses to achieve the most favorable outcome.
Insurance fraud imposes costs on everyone through higher premiums and reduced benefits over time. Understanding New Jersey laws like Section 2C:21-4.5 is an important step towards reducing this costly crime.