Ever wondered how Texas fights insurance fraud? In this eye-opening conversation, Rick Watson, Chief Prosecutor and Fraud Counsel for the Texas Department of Insurance's Fraud Unit, pulls back the curtain on a specialized law enforcement agency most Texans never knew existed.
Watson reveals the remarkable evolution of TDI's Fraud Unit since its 1991 founding, highlighting its unique embedded prosecutor program that places specialized attorneys in district attorney offices across Texas. This innovative approach—the only one of its kind in the nation—has yielded impressive results: over $96.7 million in court-ordered restitution over the past five years. The unit handles everything from consumers filing false vehicle theft claims to insurance professionals misappropriating premium payments, with cases ranging from $2,500 misrepresentations to multi-million dollar schemes.
Perhaps most surprising is Watson's revelation that many young people don't even consider insurance fraud wrong. "A lot of them said no," Watson explains when describing a study where millennials were asked if lying to an insurance company was criminal. "The majority didn't think it would even be a crime." This perception gap partially explains the growing caseload—from 14,180 referrals in 2020 to over 20,000 in 2024. Despite these numbers, only about 100 cases annually result in criminal charges, as prosecutors must prove actions were "knowingly and intentionally" fraudulent rather than honest mistakes.
For insurance professionals, the message couldn't be clearer: maintain honesty with consumers, stay current on continuing education, and report suspected fraud immediately. Under Texas law, anyone suspecting insurance fraud must report it—but they receive legal immunity from civil liability when doing so. Whether you're a licensed professional or concerned consumer, understanding how fraud impacts the industry benefits everyone.
Curious about reporting suspected fraud? Visit tditexas.gov or call 1-800-252-3439 to connect with TDI's Fraud Unit.
_______________________________________________
Rick Watson is the Chief Prosecutor and Fraud Counsel of the Texas Department of Insurance, Fraud Unit. Rick is responsible for supervising embedded TDI prosecutors across the state and acts as the Fraud Counsel for the Fraud Unit. Rick has over two decades of prosecutorial experience including being a prosecutor in the Harris County District Attorney’s Office, Bexar County District Attorney’s Office, San Diego County District Attorney’s Office, and the Dallas County Criminal District Attorney’s Office. Rick attended Southern Methodist University graduating with a Juris Doctorate and a master’s degree in economics in 1998.
_______________________________________________
Get more information, details and resources on Know Your Regulator - https://www.belolaw.com/know-your-regulator
