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Comment by neilv | Hacker News Reader

Good faith reporting of suspected fraud sounds fine, but a couple concerns about this:

> In one case, investigators at State Farm withheld several crucial reports contradicting their fraud allegations from the bundle of evidence they handed over the law enforcement. In another, a Farmers manager admitted under oath that there was an "unwritten policy" within the company to withhold evidence from customers that could help prove their innocence.

Besides the appearance of possible bad faith, that might also -- in the context of government relying on the insurance company to do some of the investigative work -- thwart government obligations to share evidence with a defendant.

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honestly, these companies should be fined so heavily that it's just not worth it for them.

I understand that legitimate insurance fraud needs to be investigated and prosecuted, and I'm all for it. But you give them all the evidence, period, and let them decide. You do not manipulate them to save yourself from a payout. That crosses a line that has no grey in it.

It is a finable offense...in some states, like California. Indeed, something like this could even get an insurance company's license to sell insurance in one of those states revoked.

In addition to the obvious case of bribery, deliberately misleading the police with intent to falsely imprison someone has got to be some kind of crime far worse than bad faith - defamation at the very least.

If I called the police and said "Several men entered the building, and then I heard gunshots, please hurry!", and didn't mention that I knew the building to be a firing range, I'd rightly go to jail for a long time.

How is this case different?

In this case the accused person sued the insurer who reported them to police and apparently won a settlement (that curiously did not forbid him from disparaging the insurer post-litigation).

The hypothetical you gave would be more on point if instead of deliberately withholding key information, the 911-caller made a truthful allegation for an ulterior motive. So more like, 'there are suspicious cars idling outside the firing range and people walking around with guns. Someone swung the muzzle in my direction for a moment and made me feel unsafe.'

As for the insurer paying the salary of the officer who investigates-- yeah, poor optics there but the extension of the hypothetical scenario would be that the police deprioritized gun crimes without funding and won't show up and investigate otherwise.

So the real newsworthy issue here, which the article missed, is why police departments in Pennsylvania don't investigate insurance fraud felonies unless someone in the private sector is willing to cover their expenses.

> In this case

There are many examples in the article of insurance using misleading or faulty evidence, and people ending up in prison or homeless as the result.

> So the real newsworthy issue here, which the article missed, is why police departments in Pennsylvania don't investigate insurance fraud felonies unless someone in the private sector is willing to cover their expenses.

It is mind-boggling why you would think the investigators would be impartial when paid by the insurance companies. The examples from the article certainly point to the direct opposite of that.

I have seen and heard plenty of examples from the criminal justice system where fully impartial prosecutors, under no appearance of conflict, press forward on weak evidence and weaker investigation. So no, it's not mind-boggling. The source of the officer's salary raises an eyebrow for sure. Not going to defend that, but I'm also not going to rely on a breathless and fundamentally one-sided article to explain it.

For those interested in how a serious and meritorious bad-faith claim still generates exposure for the reporting party, despite all the immunities and whatnot, see Maxwell v. AIG.[1]. The sources in the article I'm sure are aware of the potential for huge extracontractual awards, and I'm just not impressed that angle also is not discussed in the article.

[1] https://law.justia.com/cases/massachusetts/supreme-court/201...

If you actually win in court there's no non-disclosure. Those only come from agreed-up settlements.

If the insurance company withholds the evidence from the police and prosecutors they never “know” it exists and wouldn’t need to provide it.

What irks me is that they can destroy people’s lives with impunity: if they lose they just have to pay out the insured amount, they don’t need to compensate someone for making them homeless or for destroying their business.

All officers and prosecutors should be criminally liable as they are accepting bribes for prosecuting these victims.

The insurers should be liable for subverting the course of justice, and any deliberately withholding evidence that demonstrates the claim of fraud is false should make the insurance companies liable for all costs, and all “witnesses” should be separately liable for false testimony.

Yeah, failing to turn over exculpatory evidence is a clear indication of bad faith to me.

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