THIS REPORT IS AN OFFSHOOT OF THE NATIONAL WORKSHOP ON AUTO THEFT PREVENTION, 1978, WHICH CALLED FOR A STUDY OF POTENTIAL INSURANCE COMPANY LIABILITY THAT MIGHT HAMPER COMMUNICATIONS BETWEEN THESE COMPANIES AND LAW ENFORCEMENT AGENCIES. THE POSSIBILITY OF CAUSES OF ACTION, ACCORDING TO THE WORKSHOP'S PARTICIPANTS, MIGHT RETARD AUTO THEFT AND INSURANCE FRAUD INVESTIGATION. THIS REPORT REVIEWS EACH OF THE ABOVE-MENTIONED FORMS OF CIVIL LIABILITY, THEIR DEFINITION, LEGAL PRINCIPLES, AND CASE LAW, AND PROVIDES EXAMPLES OF CASES THAT CAN BE OF PRACTICAL USE TO COUNSEL IN PREPARING PLEADINGS. IT CONCLUDES THAT, ON THE GROUNDS OF PUBLIC POLICY, A DEFENSE OF PRIVILEGE IS AFFORDED TO COMMUNICATIONS BETWEEN INSURANCE COMPANIES AND THE POLICE THAT WOULD OTHERWISE CONSTITUTE A CAUSE OF ACTION IN DEFAMATION. THESE PRIVILEGED COMMUNICATIONS ARE DIVIDED INTO TWO GENERAL CLASSES: (1) COMMUNICATIONS THAT ARE ABSOLUTELY PRIVILEGED AND (2) COMMUNICATIONS THAT ARE QUALIFIEDLY PRIVILEGED. EVERY STATE ALLOWS A DEFENSE OF PRIVILEGE, AND 35 STATES AND THE DISTRICT OF COLUMBIA HAVE EXPRESSLY RULED THAT A QUALIFIED PRIVILEGE APPLIES TO COMMUNICATIONS MADE IN GOOD FAITH FOR THE PURPOSE OF AIDING LAW ENFORCEMENT. TEN OTHER STATES, WHILE NOT HAVING HAD SPECIFIC APPELLATE CASES DEALING WITH THIS KIND OF DEFAMATION, HAVE ENUNCIATED BROAD PRINCIPLES OF LAW FROM WHICH A PRIVILEGE CAN BE SUBSUMED. OTHER CONCLUSIONS OF THE REPORT ARE THAT MALICIOUS PROSECUTION ACTION WILL DEPEND ON ESTABLISHMENT OF PROBABLE CAUSE ON THE PART OF THE DEFENDANT (A LINKAGE POSING THE MOST SERIOUS PROBLEM FOR INSURANCE COMPANIES) AND THAT THE LAW OF PRIVACY PROVIDES SUBSTANTIAL AND LEGITIMATE PARAMETERS ON THE ACTIONS OF INSURANCE COMPANIES BUT LIMITS INVESTIGATORY ACTION BY THESE COMPANIES. REPORT RECOMMENDATIONS CALL FOR CORPORATE GOALS OF PREVENTING INSURANCE FRAUD, WITH INTERNAL MANAGEMENT STRUCTURES ASSISTING COMMUNICATION BETWEEN INSURANCE COMPANIES AND THE POLICE. SUCH DETERMINATION SHOULD BE PUBLICIZED. LEGISLATIVE REFORM IS ALSO SUGGESTED. FOOTNOTES ARE INCLUDED.