Ch 6

Question 1

How does theFederal Mail Fraud Statute attempt to prohibit insurance fraud?

Answer 1

Ain’t prohibits use of the USPS for the purpose of defrauding or obtaining money or property by means of false of fraudulent pretenses, representations, or promises.

Question 2

How does RICO attempt to prohibit insurance fraud?

Answer 2

This law defines arson, theft from interstate shipments, mail fraud, wire fraud, bank fraud, and interstate transportation of stolen vehicles or property as racketeering activity.

Question 3

How does a state reporting statute affect an adjuster’s handling of a claim?

Answer 3

Outlines what types of activities must reported to authorities and to whom the report must be made.

Question 4

Explain how immunity statutes can differ from one state to another.

Answer 4

Some states grant immunity only if a public authority initiated the request for information. Other states grant immunity to those who cooperate with authorities and those who initiate contact with authorities. Some states grant immunity only from civil suits. Others for both civil and criminal.

Question 5

Three common fraudulent schemes.

Answer 5

Deliberately causing, claiming a loss that has not occurred, exaggerating the amount of loss.

Question 6

Why should SIU be involved as early as possible?

Answer 6

Preserves the integrity of the investigation and facilitates the investigation. Allows the adjuster to continue working on the loss whole a parallel SIU investigation is conducted.

Question 7

Leading cause of arson?

Answer 7

Vandalism

Question 8

Why do insurers pay arson losses?

Answer 8

Insured either did not commit or proving involvement is often not possible.

Question 9

What must an insurer prove to successfully assert an arson defense against an insurer’s claim?

Answer 9

That it was deliberately set and it was set by, or at the direction of, the insured

Question 10

Four areas of proof needed in an arson investigation.

Answer 10

Incendiary fire
Opportunity
Notice
Other miscellaneous evidence

Question 11

When does fire spread horizontally?

Answer 11

If trapped from moving upward
If a great deal of crowded combustibles
If there is an accelerant

Question 12

What financial circumstances might suggest to an adjuster that the insured had a motive for arson?

Answer 12

Financial motive is present when an asset is losing value, cannot be sold, or is overinsured.

Question 13

What circumstances at the fire scene tend to show involvement by the insured?

Answer 13

Premises unlocked and alarms disabled. Any evidence that the insured knew the fire was about to occur tends to show involvement. Lack of normal personal property.

Question 14

What specific role does an adjusted play in an arson investigation?

Answer 14

Coordinates the efforts of all persons involved in the arson investigation,gives clear instructions on the scope of assignments, responds promptly to inquiries, makes the ultimate decision on the claim.

Question 15

Distinguish the tiles of an origin and cause expert and a forensic chemist in an arson investigation.

Answer 15

Origin and cause: determines how and where fire began.

Forensic chemist: identify chemical residue.

Question 16

What specific information can adjusters obtain from firefighters ?

Answer 16

Where fire started
If premises were locked
Unusual odor
Behavior of owner

Question 17

What information can an accountant provide to an arson investigation?

Answer 17

Can provide into relevant to whether the insured had a motive to commit arson.

Question 18

How do adjuster’s evaluate the plausibility of alleged burglaries to residences?

Answer 18

Were items typical of the homeowner’s lifestyle and income?

Question 19

How do adjuster’s evaluate the plausibility of alleged burglaries to commercial properties?

Answer 19

Investigate employees and neighbors. Was any property moved?

Question 20

What steps can adjuster’s take to control “padded” claims?

Answer 20

Require sworn proof of loss and supporting documentation.

Question 21

Why do SIUs exist?

Answer 21

Prove that a claim is legitimate and should be paid, determine the facts of suspicious claims, prove fraud, avoid improper and unfounded accusations that can cause bad-faith problems, to pay claims that are supported by evidence.

Question 22

What are the typical requirements of state-mandated anti-fraud plans?

Answer 22

Require specific procedures to detect internal fraud, to identify claims fraud, to report suspected claims fraud to state authorities and to index bureaus, and to initiate civil action against fraud perpetrators.

Question 23

What backgrounds and additional training do SOU personnel typically have?

Answer 23

Claims and law enforcement.

Question 24

How does violent crime control and law enforcement act of 1994 attempt to prohibit insurance fraud?

Answer 24

Makes insurance fraud a federal crime when it affects interstate commerce.

Question 25

What does the arson defense require proof of?

Answer 25

That the insured deliberately caused the fire.

Question 26

What should the fundamental issue faced by an insurance adjuster in any arson investigation be?

Answer 26

Whether to pay or resist the claim.

Question 27

What are the two keys to fighting any type of fraud?

Answer 27

Detection and investigation.

Question 28

An intentionally set fire is also know as?

Answer 28

An incendiary fire.

Question 29

Some states grant immunity from ______ suits only.

Answer 29

Civil