Three insurance fraud organizations have joined forces to lobby to ensure that budget concerns in Arizona don’t force the end of the state’s fraud bureau.

A preliminary budget proposal in Arizona would abolish the fraud unit of the Arizona Department of Insurance, halting state investigations into a wide range of insurance crimes and lead to higher insurance premiums for residents, the three groups warn.

Jan Brewer

The National Insurance Crime Bureau, Coalition Against Insurance Fraud and the International Association of Special Investigation Units urged Gov. Jan Brewer to resist the cutback, citing an increased level of insurance fraud during the current down economy.

“Since criminals seek the path of least resistance, any further cuts to the fraud unit would put the economic health of Arizona and its residents at risk,” the groups warned in the letter.

The fraud unit has already suffered from the state’s budget ax, as its full-time staff was cut to four, from 14, recently.

Organized fraud rings will rush to fill the enforcement void left by the fraud unit’s closure, the three groups predicted. “Without question, there will be an eventual and inevitable rise in insurance costs for Arizona businesses and Arizona residents,” the letter to the governor further warned.

A total of 47 state bureaus around the country have been created to investigate and prosecute insurance fraud. Several have faced budget cuts this year, but none have been wholly eliminated, according to the groups.