Hundreds of millions of dollars in claims have been reduced in the past decade since Massachusetts founded fraud-fighting task forces in more than a dozen communities, according to a recent report from the agencies behind the effort.

The Automobile Insurers Bureau of Massachusetts (AIB) and Insurance Fraud Bureau of Massachusetts (IFB) released the report Tuesday examining the 10-year history of the state’s Community Insurance Fraud Initiative (CIFI). Task forces under the CIFI began investigations in 2003 after an elderly woman was killed in Lawrence, Mass. from what was later deemed to be a staged accident.

As insurers pay claims to their policyholders, more instances of claim-inflating fraud in an area can lead to higher premiums for policyholders there.

“Generally speaking, premiums have to be high enough to cover the expense of paying claims,” the AIB and IFB stated in their report. So when claims go up, premiums generally do also.

Fighting such crime can have the opposite impact on premiums. After the introduction of task forces under the CIFI in several areas of Massachusetts, the state began seeing “dramatic” decreases in losses from insurance claims.

The following Massachusetts communities have CIFI task forces:

–Boston (founded in 2004)

–Brockton (founded in 2004)

–Chelsea/Revere (founded in 2006)

–Fall River/New Bedford (founded in 2006)

–Holyoke/Springfield (founded in 2004)

–Lawrence (founded in 2004)

–Lowell (founded in 2004)

–Lynn (founded in 2004)

–Randolph (founded in 2005)

–Worchester (founded in 2006)

For 2011, total claims in those areas were $266 million lower than they were the year before the CIFI created task forces there, according to the report.

The reduction in crime has also led to a reappearance of insurance-related business and revitalization of a “healthy auto insurance climate” in Massachusetts, according to the report, as the number of carriers offering Massachusetts auto insurance nearly doubled since 2003, from 19 to 34.

However, those numbers were likely also boosted by the sea change in Massachusetts in 2008 when strict market regulations were relaxed.

Through 2011, the average annual savings per vehicle was $185 for a policyholder residing in the ten CIFI communities. Statewide, even non-CIFI communities saw premium savings, which the report pegged at $139 per vehicle.

Boston was the task force-equipped city showing the highest premium savings amount, totaling $346.9 million. The Holyoke/Springfield area showed the next-highest premium savings total, with $98.7 million, while Worchester showed the third-highest, with $78.4 million.

Crash in 2003 Sparked Task Force Investigation

The first CIFI task force’s inaugural case began in Lawrence, Mass., where a 65-year-old woman was killed in a car crash in 2003. The ensuing investigation discovered a complex network of “staged accident participants and facilitators” involving lawyers, physicians and “runners” whose job was to recruit more individuals for the schemes.

Using a database from the AIB, investigators were able to find health care providers whose billing practices were “outliers” in Lawrence. Pursuit of those providers by authorities and in court scattered criminal enterprises and activities that had wracked the city, according to the report.

“Some chiropractors were charged and convicted,” the report said. “Some lost their licenses to practice. Some simply closed their clinics and disappeared.”

The result is noticeable to this day: only seven “high-volume” chiropractors and physical therapists exist in Lawrence currently, compared with 22 before the CIFI task force was created in Lawrence. Total billing from those entities, which were marked by task forces for billing more than $100,000 annually, is 90 percent lower since that time, according to the report.

Task Forces Have Cut Down on Injuries, Kept Lid on Crime

Lawrence, once identified as “the worst hotbed” of shady claims in Massachusetts, registered 141 reported injuries per every 100 accidents before the task force was created in 2004. That injury-to-accident ratio was four times the statewide average, according to the report.

That ratio was halved in the first year the CIFI began work in Lawrence and hovered around 50 reported injuries per every 100 accidents since 2006. It was 49.4 reported injuries per every 100 accidents in 2011.

Although the report said that non-CIFI communities could not entirely attribute reductions in costs and crime to work by task forces, it credited CIFI as a “major contributing factor.”

CIFI programs applied “deterring effects that will serve to keep future losses and premiums down, providing ongoing savings to both insurance companies and policyholders,” the report stated.

The CIFIs are still currently active and continue operations to this day. Last month, investigators with the CIFI task force in Lawrence issued charges against a resident who said his 2005 Chevy Malibu sustained damage in a hit-and-run, according to a newsletter update from the IFB.

The man filed a claim with MetLife Auto & Home seeking compensation for damage to his front end and bumper that investigators eventually found were consistent with a vehicle striking a “fixed vertical object”; the man allegedly admitted later that the claim was fake and that he hit a light pole while driving.

There have been nearly 2,000 people charged with various insurance-related crimes statewide since 2003, according to the report, which credited those charges with keeping a lid on future activity from such criminals.

Counting the number of people charged, Boston and Lawrence were neck-and-neck in outpacing all other communities in the state where CIFIs operated; Boston had 488 while Lawrence had 484, according to the report.

“There has not been a return of these fraud schemes to the state,” the report stated.