This report is to explore critical insurance fraud policy issues in Texas through the case study of automobile insurance fraud. The research begins with the study of the level of insurance fraud in New York State and Florida by examining the indices of insurance fraud: fraud cases received, cases opened, arrests, prosecutions, convictions, etc. The following study of insurance fraud in Texas adopts the same method, where automobile insurance companies' fraud reporting behavior is examined and a comparison with New York State and Florida is conducted. The legal and administrative environment of fraud reporting and fraud control follows up to examine why there is a significant gap of the level of insurance fraud between Texas and the other two states as well as to examine the underling factors that affect insurers' fraud reporting and fraud combating behavior. Taking into account the current level of insurance fraud in Texas, policy issues of fraud control are discussed and special emphasis is given to the analysis of the Fraud Control Utility Model and Fraud Control Pyramid Model. Finally, given the status quo of Texas anti-fraud environment, six fraud control policy recommendations are developed.