Insurance firm must pay in claims fraud

By The Associated Press

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PORTLAND — A jury has ordered Farmers Insurance Co. to pay $9.5 million to policyholders the company defrauded in Oregon by reducing the payments for their medical expenses after auto accidents.

After two days of deliberations, the jury ruled Friday that from 1998 to 1999, Farmers used a formula to reduce the reimbursement to doctors, claiming charges were higher than reasonable compared with the charges of other medical providers in the same geographic area.

Farmers officials could not be reached for comment.

The $9.5 million award will be paid to about 7,200 Oregonians who were represented in the class-action lawsuit. In addition, more than 1,500 Oregon doctors, chiropractors, therapists, hospitals and other providers might be entitled to share in the verdict, said the attorneys in the case.

Also named in the lawsuit were two insurance companies affiliated with Farmers, Mid-Century Insurance and Truck Insurance Exchange.

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