Integrated Anti-Fraud Prevention and Detection Plans
We prepare custom or standardized anti-fraud plans to detect and investigate suspected fraudulent claims in all lines of business setting forth our clients corporate proactive anti-fraud strategy that, depending on the lines of business, may include but is not limited to: developing an anti-fraud mission statement and workable definition of insurance fraud; identification of key program components and elements; setting a time table for implementation of the SIU program and determination of the means to measure the effectiveness of the SIU program; develop public awareness programs and use of media and printed materials; address SIU annual compliance reporting and legal remedies and collection of restitution; identification of external fraud prevention and detection procedures and guidelines regarding SIU objectives, focus, structure, functions, activities, organization, staffing, detection, referrals, and reporting procedures and cooperation with governmental agencies.
We verify dedicated SIU personnel have knowledge and experience in general claims practices, analysis of claims patterns of fraud, current trends in fraud, education and training in specific red flag events (circumstances or events which, singly or in combination, support an inference that insurance fraud may have been committed), events and other criteria indicating possible fraud. We evaluate the adequacy of SIU staffing by determining the insurer's ability to establish, operate and maintain an SIU that is in compliance with SIU regulations based on specific criteria and benchmarks.
SIU Contracted Responsibilities and Vendor Panel Management
We prepare and/or review and analyze SIU contract service provider agreements for compliance with California law. We have our own SIU Operating and Service Agreements as an SIU contract service provider. We establish and enforce vendor service guidelines. We confirm each agreement complies with SIU regulations that contain specific provisions setting forth the duties and the functions to be performed by each of the contracting parties, how the insurer monitors performance as well as verify there are no provisions in the agreement that provide disincentives to the referral and/or investigations of suspected insurance fraud. We insure there are provisions that the SIU provider comply with California's SIU regulations and IFPA and verify an executed copy of the SIU service agreement is submitted to the CDI, Fraud Division upon execution.
Communication with Fraud Division and Governmental Agencies
We verify the insurer and any contract party comply with the IFPA regarding communications with the Fraud Division and authorized governmental agencies. This includes responding to written requests and release all relevant information related to any specific incident of fraud within the specific time requirements set by the Regulations.
Detecting Suspected Insurance Fraud
We verify the insurer has identified integral anti-fraud personnel responsible for identifying suspected insurance fraud during the handling of the insurance transaction and referring it to the SIU as part of their regular duties. An insurer's integral anti-fraud personnel may include claims handlers, underwriters, policy handlers, call center staff within the claims or policy function, legal staff, and other employee classifications that perform similar duties. We verify the SIU has written procedures to be used by the integral anti-fraud personal to detect, identify, document and refer questionable fraud to the SIU including a listing of red flags provided by the National Insurance Crime Bureau. We confirm there are procedures for detecting questionable fraud for comparison of any insurance contract against patterns and trends of possible fraud, red flags, events or circumstances present on a claim, and behavior history of persons submitting a claim/application.
Investigating Suspected Insurance Fraud
We verify the SIU established and distributed written procedures for the investigation of possible suspected insurance fraud including a thorough analysis of the claims file, application or insurance transaction. These procedures must also include the identification and interview of potential witnesses who may provide information on the accuracy of claim or application; the use of industry-recognized databases; preservation of documents and other evidence; preparation of a concise and complete summary of the investigation, including the investigators findings regarding questionable fraud and the basis in support of these findings that are not based on conclusions.
Referral of Suspected Insurance Fraud
We verify suspected insurance fraud is being properly referred to the Fraud Division where the facts and circumstance of the claim create a reasonable belief that a person or entity may have committed or is committing insurance fraud. (Reasonable belief is a level of belief that an act of insurance fraud may have or might be occurring for which these is an objective justification based on articulable facts and rational inferences therefrom) Referrals are to be made within 60-days after the insurer makes a determination the claim appears to be fraudulent.
SIU Fraud Awareness Training
We verify the insurer maintains an ongoing anti-fraud training program, planned and conducted to develop and improve the anti-fraud awareness skills of the integral anti-fraud personnel and designate an SIU. The training program applies to three levels of employees. Newly-hired employees must receive anti-fraud orientation within 90 days of commencing assigned duties regarding the function and purpose of the SIU, overview of fraud detection and referrals of suspicious claims, review of Fraud Division reporting requirements, organizational chart depicting the insurer's SIU and SIU contact telephone numbers. Insurers are to provide annual anti-fraud in-service training to integral anti-fraud personnel regarding the function and purpose of the SIU, introduction and review of written procedures regarding the identification, documentation and referral of suspicious claims to the SIU, identification and recognition of red flags or red flag events.
Compliance with Regulations
We verify the insurer has adopted and communicated to its claims handling and SIU personnel written standards for the prompt investigation and processing of claims. We confirm the insurer has provided adequate training regarding California's Fair Claim Settlement Regulations to all claims handling personnel including executing an annual written certification under penalty of perjury stating that the carrier's claims manual contained a copy of the Regulations. We further verify the insurer has clear written instructions regarding procedures to be followed by all claims handling personnel. Noteworthy is the fact the Regulations mandate carriers have a claims manual.
SIU Auditing To Confirm Compliance with Anti-Fraud Plan
We can provide monthly or quarterly onsite audits of claim/SIU files that meet our clients specific needs whether kept in one centralized location or multiple locations. We conduct one-on-one interviews with our clients' integral anti-fraud and SIU personnel to verify compliance with our client's integrated anti-fraud plan and written procedures to detect, identify, document and the timely referral of suspected insurance fraud to the SIU in compliance with 10 CCR ? 2698.36. We also verify our clients integral anti-fraud and SIU personnel are following written procedures for the investigation of possible suspected insurance fraud in compliance with 10 CCR ? 2698.36 including the proper referral of suspected fraudulent claims to the CDI, Fraud Division in compliance with 10 CCR ? 2698.37. We also verify that ongoing anti-fraud training is being provided to the insurer's newly hired employees, integral anti-fraud personnel and SIU personnel pursuant to the provisions of 10 CCR ? 2698.39.
SIU Annual Reporting
We prepare SIU Compliance Reports for all states our clients conduct business regarding the existence and proper maintenance of the SIU. In California, we can certify the SIU is operating in accordance with the purposes, objectives, functions and activities as set forth in 10 CCR ? 2698 set seq. We also represent our clients at CDI, Fraud Division Compliance Audits of our clients SIU and related operations, including operations undertaken by entities under contract to determine compliance with the requirements of the regulations and identification of violations. If corrective action is necessary after receipt of an examination report, we can assist our clients in preparing an action plan demonstrating how our clients can correct any violations and achieve compliance that will be a supplement to the annual report as well as the preparation of written rebuttal to any erroneous findings of non-compliance contained in the examination report.
If after examination, or upon the basis of other information, the commission has good cause to believe that an insurer did not comply with the requirements of the IFPA and the SIU Regulations relative to the maintenance and operation of the SIU, the commission will notify the insurer of its noncompliance. A civil penalty for non-compliance can be assessed in the amount of $5,000 for each act, or, if the act was willful, a civil penalty can be assessed in an amount not to exceed $10,000 for each act. The commissioner has the discretion to determine what constitutes an act. If corrective action is necessary after receipt of an examination report, we can assist our clients in preparing an action plan demonstrating how our clients can correct any violations and achieve compliance that will be a supplement to the annual report as well as the preparation of written rebuttal to any erroneous findings of non-compliance contained in the examination report.
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