Can An Insurance Company Commit Insurance Fraud?

Just about every day, Google News finds another story for me concerning Workers Compensation fraud (that's because I ask it to, of course, demented soul that I am.) And guess what? The guilty parties (or the accused parties, sometimes) are always workers who, according to the charges, falsified or exaggerated their injuries, or else they are employers who, according to the charges, avoided proper and legitimate Workers Compensation insurance premiums by various devious means.

Then I read this article. and something in it triggered a thought I have sometimes entertained: how come insurance companies are never prosecuted under the various Workers Compensation fraud statutes that states have enacted in recent years? As the mother of this injured young worker wrote:

Why isn’t there a place in the Virginia State Police Insurance Fraud Program to include and investigate this obvious type of abuse and misuse by law firms such as this one? This has been typical and repeated for the last 5 years!

“Insurance fraud is a crime that occurs when someone tries to make money from insurance transactions through deception” –This definition was copied from the State Police website.

Now, I don't know anything about this particular case. But this mother does raise a valid point, I think. How come insurance companies aren't held to the same standard as employers and workers? On a regular basis, in our consulting work, we find instances of insurance companies making errors that overcharge employers for Workers Compensation insurance. And we can usually get those corrected for our clients. But what about all the employers who don't hire someone like Advanced Insurance Management? The insurance regulatory system isn't proactive--it only requires insurers to reverse overcharges when someone knows enough to complain, and how to make that complaint in an effective manner. But in most states,  insurance department's aren't routinely double checking how insurance companies compute premium charges for employers--insurance companies are on the honor system, I guess.

I still believe that many, perhaps most, of the overcharges we find are indeed the result of honest mistakes. The insurance underwriters and auditors I have known over the years have been among the most ethical and honest business professionals I have ever met. And yet---and yet, one sometimes wonders, when one sees how certain insurance companies seem to have adopted aggressive audit tactics, or when one reads of lawsuits by one major insurer accusing another major insurer of deliberate and systemic deceptions regarding Workers Compensation insurance premiums, and one sees insurers time and time again "innocently" forgetting or misinterpreting insurance regulations meant to protect employers from excess premiums--sometimes one wonders.