Declares that the purpose of this act is to confront the problem of insurance fraud in this state by making a concerted effort to detect insurance fraud, reduce the occurrence of fraud through criminal enforcement and deterrence, require restitution of fraudulently obtained insurance benefits, and reduce the amount of premium dollars used to pay fraudulent claims. The primary focus of the insurance fraud program is on organized fraudulent activities committed against insurance companies.

Establishes an insurance fraud program within the office of the insurance commissioner.

Provides that any documents, materials, or other information in the possession or control of the commissioner and prosecutors that are provided or obtained by the commissioner in an investigation of suspected or actual fraudulent insurance acts are confidential by law, privileged, not subject to public disclosure under chapter 42.17 or 42.56 RCW, not subject to subpoena, and not subject to discovery or admissible in evidence in any private civil action. However, the commissioner and prosecutors are authorized to use the documents, materials, or other information in the furtherance of (1) any regulatory or legal action brought as part of the commissioner's official duties, or (2) criminal prosecution.

Requires the commissioner to prepare an annual report of the activities of the fraud program. The report shall be submitted to the legislature no later than March 1st for the prior calendar year. The report shall, at a minimum, include information as to the number of cases reported to the commissioner, the number of cases referred for prosecution, the number of convictions obtained, and the amount of money recovered.