§ 626.9891. Insurer anti-fraud investigative units; reporting requirements; penalties for noncompliance. (1) As used in this section, the term: (a) “Anti-fraud investigative unit” means the designated anti-fraud unit or division, or contractor authorized under subparagraph (2)(a)2. (b) “Designated anti-fraud unit or division” includes a distinct unit or division or a unit or division made up of employees whose principal responsibilities are the investigation and disposition of claims who are also assigned investigation of fraud. (2) By December 31, 2017, every insurer admitted to do business in this state shall: (a) 1. Establish and maintain a designated anti-fraud unit or division within the company to investigate and report possible fraudulent insurance acts by insureds or by persons making claims for services or repairs against policies held by insureds; or 2. Contract with others to investigate and report possible fraudulent insurance acts by insureds or by persons making claims for services or repairs against policies held by insureds. (b) Adopt an anti-fraud plan. (c) Designate at least one employee with primary responsibility for implementing the requirements of this section. (d) Electronically file with the Division of Investigative and Forensic Services of the department, and annually thereafter, a detailed description of the designated anti-fraud unit or division or a copy of the contract executed under subparagraph (a)2., as applicable, a copy of the anti-fraud plan, and the name of the employee designated under paragraph (c). An insurer must include the additional cost incurred in creating a distinct unit or division, hiring additional employees, or contracting with another entity to fulfill the requirements of this section, as an administrative expense for ratemaking purposes. (3) Each anti-fraud plan must include: (a) An acknowledgement that the insurer has established procedures for detecting and investigating possible fraudulent insurance acts relating to the different types of insurance by that insurer; (b) An acknowledgment that the insurer has established procedures for the mandatory reporting of possible fraudulent insurance acts to the Division of Investigative and Forensic Services of the department; (c) An acknowledgement that the insurer provides the anti-fraud education and training required by this section to the anti-fraud investigative unit; (d) A description of the required anti-fraud education and training; (e) A description or chart of the insurer’s anti-fraud investigative unit, including the position titles and descriptions of staffing; and (f) The rationale for the level of staffing and resources being provided for the anti-fraud investigative unit which may include objective criteria, such as the number of policies written, the number of claims received on an annual basis, the volume of suspected fraudulent claims detected on an annual basis, an assessment of the optimal caseload that one investigator can handle on an annual basis, and other factors. (4) By December 31, 2018, each insurer shall provide staff of the anti-fraud investigative unit at least 2 hours of initial anti-fraud training that is designed to assist in identifying and evaluating instances of suspected fraudulent insurance acts in underwriting or claims activities. Annually thereafter, an insurer shall provide such employees a 1-hour course that addresses detection, referral, investigation, and reporting of possible fraudulent insurance acts for the types of insurance lines written by the insurer. (5) Each insurer is required to report data related to fraud for each identified line of business written by the insurer during the prior calendar year. The data shall be reported to the department by March 1, 2019, and annually thereafter, and must include, at a minimum: (a) The number of policies in effect; (b) The amount of premiums written for policies; (c) The number of claims received; (d) The number of claims referred to the anti-fraud investigative unit; (e) The number of other insurance fraud matters referred to the anti-fraud investigative unit that were not claim related; (f) The number of claims investigated or accepted by the anti-fraud investigative unit; (g) The number of other insurance fraud matters investigated or accepted by the anti-fraud investigative unit that were not claim related; (h) The number of cases referred to the Division of Investigative and Forensic Services; (i) The number of cases referred to other law enforcement agencies; (j) The number of cases referred to other entities; and (k) The estimated dollar amount or range of damages on cases referred to the Division of Investigative and Forensic Services or other agencies. (6) In addition to providing information required under subsections (2), (4), and (5), each insurer writing workers’ compensation insurance shall also report the following information to the department, on or before March 1, 2019, and annually thereafter: (a) The estimated dollar amount of losses attributable to workers’ compensation fraud delineated by the type of fraud, including claimant, employer, provider, agent, or other type. (b) The estimated dollar amount of recoveries attributable to workers’ compensation fraud delineated by the type of fraud, including claimant, employer, provider, agent, or other type. (c) The number of cases referred to the Division of Investigative and Forensic Services, delineated by the type of fraud, including claimant, employer, provider, agent, or other type. (7) An insurer who obtains a certificate of authority has 6 months in which to comply with subsection (2), and one calendar year thereafter, to comply with subsections (4), (5), and (6). (8) If an insurer fails or otherwise refuses to comply with the provisions of this section, the department, office, or commission may: (a) Impose an administrative fine of not more than $2,000 per day for such failure until the department, office, or commission deems the insurer to be in compliance; (b) Impose an administrative fine for failure by an insurer to implement or follow the provisions of an anti-fraud plan or anti-fraud investigative unit description; or (c) Impose the provisions of both paragraphs (a) and (b). (9) On or before December 31, 2018, the Division of Investigative and Forensic Services shall create a report detailing best practices for the detection, investigation, prevention, and reporting of insurance fraud and other fraudulent insurance acts. The report must be updated as necessary but at least every 2 years. The report must provide: (a) Information on the best practices for the establishment of anti-fraud investigative units within insurers; (b) Information on the best practices and methods for detecting and investigating insurance fraud and other fraudulent insurance acts; (c) Information on appropriate anti-fraud education and training of insurer personnel; (d) Information on the best practices for reporting insurance fraud and other fraudulent insurance acts to the Division of Investigative and Forensic Services and to other law enforcement agencies; (e) Information regarding the appropriate level of staffing and resources for anti-fraud investigative units within insurers; (f) Information detailing statistics and data relating to insurance fraud which insurers should maintain; and (g) Other information as determined by the Division of Investigative and Forensic Services. (10) The department may adopt rules to administer this section, except that it shall adopt rules to administer subsection (5). (11) (a) The information submitted to the department pursuant to paragraphs (3)(d), (e), and (f) and paragraphs (5)(d), (e), (f), (g), and (k) is exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution. (b) This subsection is subject to the Open Government Sunset Review Act in accordance with s. 119.15 and shall stand repealed on October 2, 2022, unless reviewed and saved from repeal through reenactment by the Legislature. (c) This exemption applies to records held before, on, or after the effective date of this act. 69D-2.001 Purpose and Scope. The purpose of this rule chapter is to implement the provisions of Section 626.9891, FS., establishing guidelines and reporting requirements for insurer anti-fraud investigative units and anti-fraud plans. Specific Authority: 624.308, FS., 626.9891, FS., 626.9891(8), FS.; Law Implemented: 624.307, FS., 626.9891(8), FS.; History-New. 69D-2.002 Definitions. For the purposes of this rule: (1) “Division” refers to the Department of Financial Services, Division of Insurance Fraud. (2) “NAIC” refers to the National Association of Insurance Commissioners. (3) “Office” refers to the Office of Insurance Regulation. (4) “SIU” refers to an insurer’s internal or contracted anti-fraud investigative unit. Specific Authority: 624.308, FS., 626.9891, FS., 626.9891(8), FS.; Law Implemented: 624.307, FS., 626.9891(8), FS.; History-New. 69D-2.003 Insurer SIUs. (1) An insurer subject to Section 626.9891(1), FS., shall file with the Division a detailed description of their SIU, and shall submit the following information in the SIU description to satisfy this filing requirement: (a) The names of all personnel assigned to the SIU, and a description of each person’s work responsibilities relating to the SIU’s anti-fraud efforts; (b) An acknowledgment that the SIU has established criteria that will be used to detect suspicious or fraudulent activity during investigations relating to the different types of insurance offered by that insurer; (c) An acknowledgment that the SIU has established criteria that will be used for the investigation of acts of suspected insurance fraud relating to the different types of insurance offered by that insurer. (d) An acknowledgment that the insurer or SIU shall report all suspected fraudulent insurance acts directly to the Division electronically via Form DFS-L1-1691 (Eff._____) “Suspected Fraud Referral Form,” or an electronic reporting interface that is linked to such form, as provided on the Division’s website at www.fldfs.com/fraud/. Form DFS-L1-1691 (Eff.______) Suspected Fraud Referral Form is hereby adopted and incorporated by reference. (e) An acknowledgment that all such reports of suspected insurance fraud shall contain information that clearly defines and supports the allegation of suspicious activity. (f) An acknowledgement that the insurer or SIU shall record the date that suspected fraudulent activity is detected, and shall record the date that reports of such suspected insurance fraud are sent directly to the Division; (g) An acknowledgement that the insurer or SIU shall provide training relating to the detection and investigation of fraudulent insurance acts for all personnel involved in anti-fraud related efforts. (h) An acknowledgement that the insurer or SIU shall provide on-going training during the reporting period; (i) The contact information including names, email addresses, and telephone numbers, for personnel designated by the insurer or SIU to be responsible for achieving and maintaining compliance with Section 626.9891(1), FS., and this rule chapter; (j) The insurer’s NAIC individual and group code numbers; (2) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, shall submit this SIU description electronically via the Division’s website at www.fldfs.com/fraud/. The SIU description shall be submitted electronically on Form DFS-L1-1689 (Eff.____) “SIU Description Form” as provided on the Division’s website at www.fldfs.com/fraud/. Form DFS-L1-1689 (Eff.____) SIU Description Form is hereby adopted and incorporated by reference. The insurer’s filing of the information required in subsection (1) above shall constitute an adequately detailed description of its SIU as required by Section 626.9891(1), FS. (3) Nothing in this rule shall require that an SIU utilize all established criteria in every circumstance. (4) The filing of the information required herein is not intended to constitute a waiver of an insurer’s privilege, trade secret, confidentiality or any proprietary interest in its SIU, its SIU description, or its SIU policies and procedures. Specific Authority: 624.308, FS., 626.9891, FS., 626.9891(8), FS.; Law Implemented: 624.307,FS., 626.989, FS., 626.9891(1), FS.; History-New. 69D-2.004 Insurer Anti-Fraud Plans. (1) An insurer subject to Section 626.9891(2), F.S., shall file with the Division of Insurance Fraud such anti-fraud plan, and such anti-fraud plan shall include: (a) A written description or chart outlining the organizational arrangement of the insurer’s anti-fraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts. (b) A description of the insurer’s procedures for detecting and investigating possible fraudulent insurance acts. Nothing in this rule shall require that an insurer utilize all established criteria in every circumstance. This description shall include: 1. An acknowledgment that the insurer has established criteria that will be used to detect suspicious or fraudulent activity during investigations relating to the different types of insurance offered by that insurer; 2. An acknowledgment that the insurer has established criteria that will be used for the investigation of acts of suspected insurance fraud relating to the different types of insurance offered by that insurer. (c) A description of the insurer’s procedures for the mandatory reporting of possible fraudulent insurance acts to the Division pursuant to Section 626.989(6), F.S. This description shall include: 1. An explanation of the insurer’s method for reporting all suspected fraudulent insurance acts directly to the Division electronically on Form DFS-L1-1691, as incorporated and provided for in paragraph 69D-2.003(1)(d), F.A.C. 2. An acknowledgment that all such reports of suspected insurance fraud shall contain information that clearly defines and supports the allegation of suspicious activity. 3. An acknowledgment that the insurer shall record the date that suspected fraudulent activity is detected, and shall record the date that reports of such suspected insurance fraud are sent directly to the Division. (d) A description of the insurer’s plan for anti-fraud education and training of its claims adjusters and any other personnel involved in anti-fraud related efforts. This description shall include: 1. A plan that involves training relating to the detection and investigation of fraudulent insurance acts for all employees involved in anti-fraud related efforts. 2. A plan that involves on-going training during the reporting period; (e) The contact information, including names, e-mail addresses, and telephone numbers, for personnel designated by the insurer to be responsible for achieving and maintaining compliance with Section 626.9891(2), F.S., and this rule chapter; (f) The insurer’s NAIC individual and group code numbers; (2) An insurer subject to Section 626.9891(2), F.S., and this rule chapter, shall submit this anti-fraud plan electronically via the Division’s website at www.myfloridacfo.com. The anti-fraud plan shall be submitted electronically on Form DFS-L1-1690 (Eff. 10-5-06) “Anti-Fraud Plan Form as provided on the Division’s website at www.fldfs.com/fraud/. Form DFS-L1-1690 (Eff. 10-5-06) Anti-Fraud Plan Form is hereby adopted and incorporated by reference. The insurer’s filing of the information required in subsection (1) above shall constitute an acceptable anti-fraud plan as required by Section 626.9891(2), F.S. (3) The filing of the information required herein is not intended to constitute a waiver of an insurer’s privilege, trade secret, confidentiality or any proprietary interest in its anti-fraud plan or its anti-fraud related policies and procedures. 69D-2.005 Compliance and Enforcement. (1) The Division shall review the filings of SIU descriptions and insurer anti-fraud plans and the Office shall conduct audits pursuant to Section 624.3161, F.S., to determine compliance with Section 626.9891, F.S., and this rule chapter. (2) If an insurer fails to timely file an anti-fraud plan or SIU description, fails to implement or follow the provisions of their anti-fraud plan or SIU description, or in any other way fails to comply with the requirements of Section 626.9891, F.S., and this rule chapter, the Office shall take appropriate administrative action as provided in Sections 626.9891(7) and 624.4211, F.S.