6-F FRAUD AND FALSE STATEMENTS REGULATION

Question 1

Fraud:

Answer 1

​the act of deliberately misrepresenting, altering, or perverting the truth, or willfully deceiving a regulatory agency or agent in order to realize financial gain.

Question 2

Interstate commerce: commerce in D.C., any state, or any territory of the U.S., if:

Answer 2

● It crosses state lines, even if its end point is in the same state as its starting
point
● It is any sort of commerce under U.S. jurisdiction

Question 3

Business of insurance: ​anything having to do with:

Answer 3

● Writing insurance policies
● Reinsurance

This includes the actions of anyone involved in or representing someone in the insurance industry (from CEO’s down to employees).

Question 4

Anyone involved in insurance business who is convicted of:

Answer 4

● Making ​false statements ​on financial reports
● Over-valuing ​land, property, etc. to deceive examiner

Will pay the ​larger​ of:
● Up to $50,000 per violation, ​or
● The amount that person made or paid while engaging in fraud

Question 5

If fraudulent insurance company goes out of business:

Answer 5

● Funds collected from penalty are distributed among:
○ policyholders
○ claimants
○ creditors

Guilty person:
● Could be further penalized according to other laws and statutes, if they apply
● May face up to 10 years in prison, or 15 years in prison if crime threatened
financial stability/safety of an insurer

Question 6

Penalties for ​embezzlement ​or​ misappropriation​ of funds:

Answer 6

● Fine greater of:
○ $50,000 per violation
○ amount the offender gained or paid in the process of committing the crime
● Up to 10 years in prison, or 15 years if crime threatened insurer’s financial wellbeing
● Court may impose a fine, imprisonment, or both

If amount embezzled is $5,000 or less:
● Same fine
● Up to 1 year in prison
● Court may impose a fine, imprisonment, or both

Question 7

Penalties for ​false entry in a book, report, or statement​ regarding an insurer’s financial situation:

Answer 7

● Fine greater of:
○ $50,000 per violation
○ amount the offender gained or paid in the process of committing the crime
● Up to 10 years in prison, or 15 years if crime threatened insurer’s financial wellbeing
● Court may impose a fine, imprisonment, or both

Question 8

Individual who ​interferes with police investigation​ of insurance company faces:

Answer 8

● Fine greater of:
○ $50,000 per violation
○ amount the offender gained or paid in the process of committing the
crime
● Up to 10 years in prison

Question 9

Convicted felons may not go back into insurance business without express _______.

Answer 9

permission

Question 10

If felony involved lack of honesty or untrustworthy behavior, or any aforementioned crime, and felon continues to work in insurance industry without permission, penalties may include:

Answer 10

● Fine of $50,000 or more
● 5 years imprisonment, or
● Both

Question 11

1033 Waiver:

Answer 11

● Allows felon to return to work in insurance industry
● Only available if:
○ felon has been offered work in insurance, or
○ felon is applying for a position that needs a license from Dept. of
Insurance

Question 12

1033 Form

Section 1: Applicant Information

Answer 12

● Name
● Address
● Place of birth
● Citizenship status
● Any other names, including maiden name
● Spouse’s information
● Bankruptcy history

Question 13

1033 Form

Section 2: Education

Answer 13

● Detailed account of level of education obtained, and where

Question 14

1033 Form

Section 3: Employment History

Answer 14

● List complete job history
● List any and all licenses, insurance-related or otherwise
● Details of any licenses that were suspended or revoked
● List any actions filed

Question 15

1033 Form

Section 4: Criminal History

Answer 15

● Narrative history of infraction that led to needing this application
● List of any other criminal activities, with narratives for each
● Details regarding fines, restrictions, rehab, etc.

Question 16

1033 Form

Section 5: Present/proposed Insurance Employment

Answer 16

● Detailed description of job

● Reasons why criminal history will not affect work

Question 17

1033 Form

Section 6: Financial Information

Answer 17

● Financial statements and net worth
● All income for the last 5 years
● Any fidelity bonds obtained or denied
● Any employer that went bankrupt
● Any insurance businesses that any family member works for

Question 18

1033 Form

Section 7: Grounds Relied Upon For Application For Written Consent

Answer 18

● Statement giving reasons why working offered job will not pose a risk to insurance agency or customers
● 3 letters of recommendation

Question 19

1033 Form

Section 8: Attachments

Answer 19

● 2 photographs
● Copies of:
○ requests for criminal record check and credit report
○ proposed agreement between applicant and insurance entity
○ any pardon
○ indictment, criminal complaint, etc.
○ judgment and sentence of the court
● A sworn affidavit from insurance employer
● Evidence of rehabilitation (letters of recommendation, post-conviction
community service or charity work, etc)

Question 20

1033 Form

Section 9:

Answer 20

Sworn statement verifying truth of information in application and authorization for release of information