Required Anti Fraud Awareness Training

Question 1

What is the Coalition against insurance Fraud?

Answer 1

A group comprised of 281 member organizations that include both private and public groups. Formed in 1993.

Roughly 308 billion lost to insurance fraud each year

Question 2

The California Department of Insurance

Answer 2

1400 Employees and 30 percent work in the enforcement Branch. ‘

Of the 11 branches in CDI, Enforcement branch is the largest.

Question 3

Fraud Division in Enforcement Branch

Answer 3

Handles Fraud committed against the insurance industry such as claimant fraud.

Question 4

Investigation Division

Answer 4

This division handles fraud and misconduct committed by agents, licensed and unlicensed, brokers and insurers

Question 5

What is the mission of the Investigation Division?

Answer 5

The mission is to protect California consumers by investigating suspected violations of laws and regulations pertaining to the business of insurance and seeking appropriate enforcement actions against violators.

The division pursues prosecution of offenders through both REGULATORY and CRIMINAL justice systems

Question 6

What are some examples of case work done by the Investigation Division?

Answer 6

1. Agents forging documents and committing identity theft
2. Premium theft
3. Broker/Agent misappropriating premium payments and providing clients with phony docs as proof of coverage

Question 7

The Fraud Division

Answer 7

This division is staffed by sworn personnel who conduct criminal investigations into various types of insurance fraud related violations.

It is composed of 4 separate insurance fraud programs:

1. Automobile Insurance Fraud
2. Workers’ Compensation Fraud
3. Property/Life/Casualty Fraud
4. DIsability and Healthcare Fraud

Question 8

Penal Code 549

Answer 8

Addresses illegal referrals and solicitation in connection with insurance fraud.

Question 9

Penal Code 550

Answer 9

Spells out the various unlawful acts regarding any false or fraudulent claim.

Question 10

Penal Code 550(b)

Answer 10

Covers unlawful acts in connection with a claim or payment or other benefit pursuant to an insurance policy. This can apply to unlawful act committed in connection with a legitimate claim for a loss.

Question 11

What is a swoop and squat?

Answer 11

This is used to force a victim to remain in their lane so a collision cannot be avoided. These types of intentional collisions are extremely dangerous.

Question 12

Special Investigative unit.

Answer 12

This unit is required to be available to investigate suspected insurance fraud on behalf of the insurance company. The unit can be comprised of internal or external employees.

Question 13

THe SIU report

Answer 13

This report is filed each fall by approx 1200 insurance companies operating in Cali. It contains statistical data, structural outlines and names and contact info for insurance companies and SIU personnel.

Question 14

Anti Fraud Training

Answer 14

1. Newly hired personnel must be given training within 90 days of commencing their assigned duties.
2. An annual training for the integral anti-fraud personnel. (Underwriters, claim adjusters, possibly premium auditors.
   SIU personnel are required to have 5 hours of continuing training annually and it must cover at least one of the topics of investigative techniques.

Question 15

The two types of penalties for anti-fraud violations

Answer 15

Considered either willful or inadvertent

Question 16

Inadvertent Penalties

Answer 16

5k max

Question 17

Willful violations

Answer 17

10k max. 10k figure can be assessed for each act of noncompliance.

All the company needs to do is be aware the statute or regulation exists.

Question 18

Theft of Premiums by agents or brokers

Answer 18

This can be the use of money provided to purchase a policy that is ultimately pocketed by an agent or broker and the poor policy holder has no idea until they have a loss and their is no coverage.

Question 19

Senate Bill SB 1242

Answer 19

This is the reason all of us are doing this training. This bill creates specific reporting requirments for agents and brokers.
I’d the policy is in the application stage and has NOT been placed with a specific carrrier then the agent or broker is required to report the red flag to THE FRAUD DIVISION CONSUMER PORTAL.
If the policy has been placed, the agent/broker will report the red flag to the insurer’s SPECIAL INVESTIGATIVE UNIT.