A bill to create a penalty for automobile insurance fraud, and for other purposes.

Summary: Cheaper Car Insurance Act of 2004 - Amends the Federal criminal code to prohibit automobile insurance fraud.

Directs the Department of Justice to publish best practices for the States to use in licensing: (1) auto body shops that perform work paid for by insurers; and (2) medical treatment provided to people who are injured in automobile accidents.

Requires the Attorney General to: (1) cooperate with the offices of the U.S. Attorneys to aggressively investigate fraudulent chop shops and salvage yards, to aggressively prosecute automobile insurance fraud, and to report statistics on investigations, prosecutions, and convictions; and (2) establish Federal-State-Local Anti-Auto Insurance Fraud Task Forces in the offices of the U.S. Attorneys in the ten U.S. cities that are most severely affected.

Grants an insurance company the right to require a mandatory inspection by an insurance company representative or agent of any motor vehicle prior to agreeing to provide insurance coverage. Permits a company to waive such right under specified circumstances. Allows an insurer to require a pre-insurance inspection of an otherwise exempt motor vehicle, but prohibits basing such decision on the age, race, sex, religion, or marital status of the applicant or insured or the fact that the vehicle has been insured through a residual or non-voluntary insurance market.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cheaper Car Insurance Act of 2004''.

SEC. 2. AUTOMOBILE INSURANCE FRAUD.

    (a) In General.--Chapter 47 of title 18, United States Code, is 
amended by inserting at the end the following:

``SEC. 1038. AUTOMOBILE INSURANCE FRAUD.

    ``(a) Whoever knowingly commits automobile insurance fraud shall be 
punished as provided in subsection (e).
    ``(b) Whoever knowingly acts as a runner, capper, or steerer shall 
be punished as provided in subsection (e).
    ``(c) Whoever knowingly acts as an organizer of an auto insurance 
fraud operation shall be punished as provided in subsection (e).
    ``(d) Whoever knowingly acts as a mastermind or leader of an auto 
insurance fraud operation shall be punished as provided in subsection 
(e).
    ``(e) The punishment for an offense under subsections (a), (b), 
(c), or (d) shall be as follows:
            ``(1) For any violation of subsection (a) in which the 
        defendant is not also convicted of being a runner, capper, or 
        steerer under subsection (b), an organizer under subsection 
        (c), or a leader or master mind under subsection (d), such 
        person shall be fined not more than $100,000, imprisoned not 
        more than 5 years, or both. If the defendant has a prior 
        conviction under subsection (a), such person shall be fined not 
        more than $100,000, imprisoned not more than 10 years, or both.
            ``(2) For any violation of subsection (b), such person 
        shall be fined not more than $100,000, imprisoned not more than 
        5 years, or both.
            ``(3) For any violation of subsection (c), such person 
        shall be fined not more than $100,000, imprisoned not more than 
        10 years, or both.
            ``(4) For any violation of subsection (d), such person 
        shall be fined not more than $100,000, imprisoned not more than 
        15 years, or both.
    ``(f) If a violation of subsection (a), (b), (c), or (d) results in 
costs that exceed $100,000, the fine imposed under subsection (b) may 
be in an amount greater than $100,000 in order to cover the resulting 
cost.
    ``(g) In this section--
            ``(1) the term `automobile insurance fraud' means fraud 
        committed by any person who knowingly and intentionally 
        presents a written statement or claim, causes a written 
        statement or claim to be presented, or prepares a written 
        statement or claim with knowledge or belief that it will be 
        presented to or by an insurer, self-insurer, or any agent 
        thereof, that such person knows--
                    ``(A) contains materially false information 
                concerning any fact material to an application, 
                certificate, evidence, or claim referred to in 
                paragraph (2); or
                    ``(B) conceals, for the purpose of misleading, 
                information concerning any fact material to an 
                application, certificate, evidence, or claim referred 
                to in paragraph (2);
            ``(2) the term `mastermind' or `leader' means any 
        individual who knowingly solicits or employs 2 or more people, 
        or conspires with 2 or more people, to engage in automobile 
        insurance fraud, and who is not also a runner, capper, steerer, 
        or an organizer;
            ``(3) the term `organizer' means any individual who 
        knowingly solicits or employs a runner, capper, or steerer, or 
        acts as a runner, capper, or steerer, with the intent of 
        seeking to falsely or fraudulently obtain benefits under a 
        contract of insurance, or to falsely or fraudulently assert a 
        claim against an insured or an insurer for providing services 
        to a client, patient, or customer;
            ``(4) the term `runner, capper, or steerer' means any 
        person who, for either direct or indirect pecuniary benefit, 
        knowingly procures or attempts to procure a client, patient, or 
        customer at the direction of, or in cooperation with, a person 
        committing automobile insurance fraud under subsection (b), 
        regardless of whether or not the person otherwise participates 
        in the fraud; and
            ``(5) the term `written statement or claim' means a written 
        statement or submission by telephone, computer, or in any other 
        electronic or digital form, that is part of, or in support of--
                    ``(A) an application for the issuance of or the 
                rating of a commercial insurance policy;
                    ``(B) a certificate or evidence of self-insurance 
                for commercial insurance or commercial self-insurance; 
                or
                    ``(C) a claim for payment or other benefit pursuant 
                to an insurance policy or self-insurance program for 
                commercial or personal insurance.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 47 of 
title 18, United States Code, is amended by adding at the end the 
following:

        ``1038. Automobile insurance fraud''.

SEC. 3. BEST PRACTICES.

    (a) In General.--The Department of Justice shall publish best 
practices for the States to use--
            (1) in licensing auto body shops that perform work paid for 
        by insurers; and
            (2) in licensing medical treatment provided to people who 
        are injured in automobile accidents.
    (b) Goal.--The goal of publishing best practices as required under 
subsection (a) is to encourage the States to adopt such practices to 
limit the feasibility of committing insurance fraud.

SEC. 4. INVESTIGATION OF FRAUDULENT PRACTICES.

    (a) In General.--The Attorney General shall cooperate with the 
offices of the United States Attorneys to--
            (1) aggressively investigate fraudulent chop shops and 
        salvage yards;
            (2) aggressively prosecute automobile insurance fraud (as 
        defined in section 1037 of title 18, United States Code); and
            (3) report statistics on investigations, prosecutions, and 
        convictions of automobile insurance fraud.
    (b) Reporting.--Statistics referred to in subsection (a)(3) shall 
be reported to the Subcommittee on Administrative Oversight and the 
Courts of the Committee on the Judiciary of the Senate and the 
appropriate Committee of the House of Representatives.

SEC. 5. FEDERAL-STATE-LOCAL ANTI-AUTO INSURANCE TASK FORCE.

    (a) Establishment of Units.--The Attorney General shall establish 
Federal-State-Local Anti-Auto Insurance Fraud Task Forces in the 
offices of the United States Attorneys in the 10 cities in the United 
States that are most severely affected, as determined by the Attorney 
General, by automobile insurance fraud (as defined in section 1037 of 
title 18, United States Code).
    (b) Purpose.--The special units established under subsection (a) 
shall investigate and prosecute automobile insurance fraud.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $25,000,000 in fiscal year 2005, 
and such sums or fiscal years thereafter as determined by Congress.

SEC. 6. INSURANCE COMPANY RIGHT TO MANDATORY INSPECTION BEFORE 
              INSURING.

    (a) Right of Inspection.--An insurance company shall have the right 
to require a mandatory inspection by an insurance company 
representative or agent of any motor vehicle prior to agreeing to 
provide insurance coverage, except as provided under subsection (b).
    (b) Exemption From Pre-insurance Inspection.--The right to inspect 
under subsection (a) may be waived by an insurance company under the 
following circumstances:
            (1) The motor vehicle is already insured under the policy 
        for either comprehensive or collision coverage.
            (2) The motor vehicle is a new vehicle purchased from a 
        retail dealership, and the insurer is provided with--
                    (A) a copy of the bill of sale containing a full 
                description of the motor vehicle, including options and 
                accessories, and a statement from the seller that the 
                motor vehicle has no damage; or
                    (B) a copy of the Manufacturer Statement of Origin, 
                a statement from the seller that the motor vehicle has 
                no damage, and a copy of the window sticker or dealer 
                invoice containing a full description of the motor 
                vehicle, including options or accessories.
            (3) An insured named in the policy has been insured by the 
        same insurer for 1 or more policy years under a policy that has 
        continuously provided physical damage coverage.
            (4) The motor vehicle is rented or leased for less than 6 
        months, provided that the insurer is given a copy of the lease 
        or rental agreement, and that the document contains a complete 
        description of the rented or leased motor vehicle, including 
        its condition at the time of lease or rental.
            (5) The motor vehicle is rated or insured under a 
        commercial automobile insurance policy.
            (6) When pre-insurance inspection would cause serious 
        hardship to the insured or applicant for insurance, and the 
        hardship is documented in records maintained by the insurer.
    (c) Non-discrimination of Pre-insurance Inspections.--An insurer 
may require a pre-insurance inspection of an otherwise exempt motor 
vehicle. The decision to require a pre-insurance inspection of an 
exempt vehicle shall not be based on the age, race, sex, religion, or 
marital status of the applicant or insured, or the fact that the motor 
vehicle has been insured through a residual or non-voluntary insurance 
market.