QUESTIONNAIRES WERE SENT TO INSURANCE COMPANIES TO FIND OUT THEIR POLICIES IN AREAS SUCH AS UNDERWRITING, CLAIMS INVESTIGATION, CLAIMS ADJUSTOR TRAINING, STATISTICAL RECORDKEEPING, INVESTIGATION AND PROSECUTION OF SUSPICIOUS CLAIMS, AND THEIR PERCEPTIONS OF ORGANIZED CRIME INVOLVEMENT IN ARSON-FOR-PROFIT. CUMULATING THE DATA FROM SURVEY RESPONSES AND COMPANY REPRESENTATIVE TESTIMONY, THE SUBCOMMITTEE DISCOVERED THAT MOST COMPANIES DO NOT INSPECT BUILDINGS PRIOR TO COVERAGE TO ASSESS THEIR VALUE, DO RELY ON THEIR AGENTS IN ACCEPTING OR REFUSING RISKS, DO NOT FORMALLY TRAIN THEIR CLAIMS ADJUSTORS, AND DO NOT KEEP COMPREHENSIVE RECORDS ON NUMBERS OF STRUCTURES LOST TO FIRE AND THE VALUE OF SUCH STRUCTURES. COMPANIES REPORT THAT OVERINSURING PLAYS A LARGE ROLE IN THE ARSON-FOR-PROFIT SCHEMES, THAT MOST ARSONISTS PARTICIPATE IN ALL FACETS OF THE CRIMES INCLUDING INSURANCE MONEY COLLECTION, AND THAT ORGANIZED CRIME IS INCREASINGLY INVOLVED IN ARSON-FOR PROFIT. COMPANIES ARE RELUCTANT TO INVESTIGATE OR REPORT SUSPICIOUS CLAIMS TO LEGAL AUTHORITIES BECAUSE FAIR PRACTICE REGULATIONS REQUIRE PROMPT PAYMENT AND PRIVACY LAWS RESTRICT FREE EXCHANGE OF INFORMATION WITH AUTHORITIES. ALSO, MOST COMPANIES LACK SUFFICIENT INFORMATION TO INVESTIGATE OR REPORT CLAIMS. THE SUBCOMMITTEE RECOMMENDS THAT COMPANIES REQUIRE ROUTINE RISK REVIEWS OF STRUCTURES PRIOR TO COVERAGE, FORMALLY TRAIN ADJUSTORS, DEVELOP INHOUSE INVESTIGATIVE EXPERTISE, EXAMINE CURRENT POLICY ON CLAIMS CHALLENGE, AND DEVELOP RECORDKEEPING SYSTEMS AND SHARE INFORMATION ON SUSPECTED ARSON.