Wisconsin Insurance Commissioner Issues $33,000 Forfeiture for Insurance Fraud

WI Insurance Press Releases

Filed April 8th, 2025

Detected March 19th, 2026

Summary

The Wisconsin Office of the Commissioner of Insurance (OCI) has issued its first forfeiture of $33,000 for insurance fraud under new statutory authority. This action addresses misrepresentations made by a transportation service owner regarding workers' compensation insurance premiums.

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What changed

The Wisconsin Office of the Commissioner of Insurance (OCI) has announced its first forfeiture action under new statutory authority, Wis. Stat. § 601.41 (12), resulting in a $33,000 penalty. This enforcement action targets Sawan Kumar, owner of a transportation service, for misrepresenting his business as a clerical dispatch operation to his workers' compensation insurer, leading to underpayments of $101,690 between 2016 and 2022. This action stems from the Interagency Coordinated Enforcement Team (IACET) initiative, established to combat insurance fraud and worker misclassification.

This forfeiture signifies the OCI's enhanced ability to investigate and prosecute insurance fraud, empowered by the 2023-25 state budget which created new authority and a dedicated attorney position. Regulated entities, particularly those in transportation and other sectors prone to misclassification, should review their insurance applications and representations to ensure accuracy. Failure to do so could result in significant financial penalties, with forfeitures directed to the state's Common School Fund.

What to do next

Review insurance applications and representations for accuracy, especially concerning business operations and employee classifications.
Ensure all premium payments accurately reflect the true nature of the business and associated risks.

Penalties

$33,000 forfeiture

Source document (simplified)

OCI > Press Release, April 8, 2025, Wisconsin’s Insurance Commissioner Issues Forfeiture of $33,000 in Action to Address Insurance Fraud

Press Release, April 8, 2025, Wisconsin’s Insurance Commissioner Issues Forfeiture of $33,000 in Action to Address Insurance Fraud

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April 8, 2025

For more information contact Sarah Smith, Director of Public Affairs, (608) 209-6309 or ** sarah.smith2@wisconsin.gov

Wisconsin's Insurance Commissioner Issues Forfeiture of

$33,000 in Action to Address Insurance Fraud

Madison, Wis. — The Wisconsin Office of the Commissioner of Insurance (OCI) has announced the issuance of the agency's first forfeiture related to insurance fraud under Wis. Stat. § 601.41 (12).

Governor Tony Evers created the Joint Enforcement Task Force on Payroll Fraud and Worker Misclassification in 2019 to propose regulatory changes to better investigate potential law violations and improve enforcement where violations have occurred. The Task Force's 2020 Report recommended creating an Interagency Coordinated Enforcement Team (IACET) which was composed of OCI, Department of Workforce Development, Department of Revenue, Department of Justice, and Department of Financial Institutions. The IACET was tasked with meeting regularly to develop recommendations targeting insurance fraud and other issues. The group identified the need to strengthen the agencies' abilities to identify and prosecute perpetrators.

“I was proud to serve on Governor Evers' Task Force to consider the impact of insurance fraud and identify opportunities to address it," said Insurance Commissioner Nathan Houdek. “Insurance fraud costs billions every year, with the average American family paying between $750-$1,000 in increased premiums due to fraud perpetrated by others. Thanks to bipartisan support from the state legislature and Governor Evers, we've been able to put new authority and resources in place to take action."

In 2023, Governor Evers signed the state budget, 2023 Wisconsin Act 19, which created new OCI authority when an investigation identifies an act of insurance fraud. Wis. Stat. § 601.41 (12) defines insurance fraud as “knowingly presenting a false or fraudulent claim" or “presenting false information in an application for insurance." The 2023-25 state budget also created an attorney position for OCI tasked with investigating alleged fraudulent insurance acts under this new authority.

“OCI has built a fraud unit from the ground up thanks to the hard work of Kelly Altschul, our attorney leading this effort," said Commissioner Houdek. “Kelly has developed a new system for receiving complaints, tips, and referrals from other entities regarding potential insurance fraud which led us to issuing our first forfeiture."

Sawan Kumar owns a transportation service in the Milwaukee area but represented his business as a clerical dispatch business on his application to his workers compensation insurer. As a result, he paid much lower insurance premiums than he should have been. Between 2016 and 2022, he continued to make various misrepresentations to his insurer that resulted in $101,690 underpayments. OCI issued a fraud forfeiture under our new statutory authority resulting in a total of $33,000. Forfeitures like these go to the state's Common School Fund, which provides books, computers, and other library materials to schools across Wisconsin.

You can report insurance fraud online or email the fraud unit to ask questions or share concerns at ocifraud@wisconsin.gov.