Regulation. Section 86.6 – Fraud prevention plans and special investigation units. (a) Every insurer writing private or commercial automobile insurance, worker’s compensation insurance, or individual, group or blanket accident and health insurance policies issued or issued for delivery in this state, which writes three thousand or more such policies in any given year, shall develop and file with the superintendent a plan for the detection, investigation and prevention of fraudulent insurance activities in this state and those fraudulent insurance activities affecting policies issued or issued for delivery in this state. (b) The plan shall include the following provisions: (1) Establishment of a full time Special Investigation Unit separate from the underwriting or claims functions of the insurer, which shall be responsible for investigation of cases of suspected fraudulent activity and for implementation of the insurer’s fraud prevention and reduction activities under the Fraud Prevention Plan. In the alternative the insurer may contract with a provider of services to perform all or part of this function, but shall remain primarily responsible for the development and implementation of its Fraud Prevention Plan. The agreement under which such services are provided shall be filed with the Insurance Frauds Bureau as part of the Fraud Prevention Plan, and must provide for specific levels of staffing devoted to the investigation of suspected fraudulent claims. In the event that investigators employed by a provider of services will be working for more than one insurer or on cases in states other than New York, the plan must apportion the percentage of the investigator’s efforts which will be devoted to working for the insurer on its New York cases. The agreement shall also require that the provider of services cooperate fully with the Department of Insurance in any examination of the implementation of the Fraud Prevention Plan, and provide any and all assistance requested by the Insurance Frauds Bureau, any other law enforcement agency or any prosecutorial agency in the investigation and prosecution of insurance fraud and related crimes. (2) A description of the organization of the Special Investigation Unit, including the titles and job descriptions of the various investigators and investigative supervisors, the minimum qualifications for employment in these positions in addition to those required by this regulation, the geographical location and assigned territory of each investigator and investigative supervisor, the support staff and other physical resources, including database access available to the Unit and the supervisory and reporting structure within the Unit and between the Unit and the general management of the insurer. If investigators employed by the Unit will be responsible for investigating cases in more than one State, the plan must apportion that percentage of the investigators’ efforts which will be devoted to New York cases. (3) The rationale for the level of staffing and resources being provided for the Special Investigations Unit including objective criteria such as number of policies written and individuals insured in New York, number of claims received with respect to New York insureds on an annual basis, volume of suspected fraudulent New York claims currently being detected, other factors relating to the vulnerability of the insurer to fraud, and an assessment of optimal caseload which can be handled by an investigator on an annual basis. (4) A description of the relationship between the Special Investigation Unit and the claims and underwriting functions of the insurer, including procedures for detecting possible fraud, criteria for referral of a case to the Unit for evaluation, and the designation of the individuals authorized to make such a referral; and a description of the relationship between the Unit and the Insurance Frauds Bureau, other law enforcement agencies and prosecutors, including procedures for case investigation, detection of patterns of repetitive fraud involving one or more insurers, criteria for referral of a case to the Insurance Frauds Bureau, designation of the individuals authorized to make such referrals, and a policy to avoid duplication of effort due to concurrent referrals by the Unit to more than one law enforcement agency. (5) Provision for the reporting of fraud data to a data collection firm to be designated by the superintendent. (6) Provision for in-service training programs for investigative, underwriting and claims personnel in identifying and evaluating instances of suspected insurance fraud, including an introductory training session and periodic refresher sessions. This description shall include course descriptions, the approximate number of hours to be devoted to these sessions and their frequency. (7) Provision for the coordination with other units of the insurer to further fraud investigations, including a periodic review of claims and underwriting procedures and forms for the purpose of enhancing the ability of the insurer to detect fraud to increase the likelihood of its successful prosecution, and for initiation of civil actions where appropriate. (8) Development of a public awareness program focused on the cost and frequency of insurance fraud, and methods by which the public can prevent it. (9) Development of a fraud detection and procedures manual for use by underwriting, claims and investigative personnel. (10) Timetable for the implementation of the Fraud Prevention Plan. (c) Persons employed by the Special Investigations Units as investigators or by an independent provider of investigative services under contract with an insurer shall be qualified by education and/or experience which shall include a bachelor’s degree or either four years of claims investigation experience or five years of professional investigation experiences involving economic or insurance related matters. Notwithstanding these minimum requirements anyone employed as an investigator in a special investigation unit as of the effective date of this provision may continue in such employment provided the insurer identifies such person in writing to the superintendent giving the date such employment began and a description of the person’s qualifications, employment history and current job duties. (d) Every insurer required to file a fraud prevention plan shall file an annual report with the Insurance Frauds Bureau no later than January 15 of each year on a form approved by the superintendent, describing the insurer’s experience, performance and cost effectiveness in implementing the plan and its proposals for modifications to the plan to amend its operations, to improve performance or to remedy observed deficiencies. The report shall be reviewed and signed by the chief executive officer of the insurer. Title 11, Part 6 Electronic Filing Section 6.2. Required electronic filings and submissions: (a) Except where the Insurance Law requires a filer to submit a hard copy, a filer shall submit to the superintendent the following electronically, in a form and manner acceptable to the superintendent: (1) Insurance Fraud Prevention Plans and Reports. A report required by Insurance Law section 405(a) and a fraud prevention plan, subsequent plan amendments, and annual reports required by Insurance Law section 409(a), (d), and (g).
(A) Except as provided in Division (D) of this section, every insurer, as defined in Division (A) of Section 3999.36 of the revised code, shall adopt an antifraud program and shall specify in a written plan the procedures it will follow when instances of insurance fraud or suspected insurance fraud are brought to its attention. The insurer shall identify in the written plan the person or persons responsible for the insurer’s antifraud program. (B)(1) An insurer shall develop a written plan required by Division (A) of this section within ninety days after obtaining its license to transact business within this state or within ninety days after beginning to engage in the business of insurance within this state and shall thereafter maintain such a written plan. (2) An insurer engaged in the business of insurance within this state on the effective date of this section shall develop a written plan required by Division (A) required by Division (A) of this section within ninety days after the effective date of this section and shall thereafter maintain such a written plan. (C) If an insurer modifies the procedures it follows for instances of insurance fraud or suspected insurance fraud, or if there is a change in the person or persons responsible for the insurer’s antifraud program, the insurer shall modify the written plan it maintains pursuant to this section. (D) The requirements of this section are not applicable to any insurer identified in Division (A) of this section that is not engaged in writing direct insurance in this state.
Section 60A.954 – Antifraud plan — Subdivision 1. Establishment. An insurer shall institute, implement, and maintain an antifraud plan. For the purpose of this section, the term insurer does not include reinsurers, self-insurers, and excess insurers. Within 30 days after instituting or modifying an antifraud plan, the insurer shall notify the commissioner in writing. The notice must include the name of the person responsible for administering the plan. An anti-fraud plan shall establish procedures to: (1) prevent insurance fraud, include: internal fraud involving the insurer’s officers, employees or agents; fraud resulting from misrepresentations on applications for insurance; and claims fraud; (2) report insurance fraud to appropriate law enforcement authorities; and (3) cooperate with the prosecution of insurance fraud cases. Subdivision 2. Review. The commissioner may review each insurer’s antifraud plan to determine whether it complies with the requirements of this section….
417:30. Insurer Antifraud Initiatives. I. Except for insurance companies writing only credit, home warranty, travel, or title insurance, every insurance company licensed to write direct business in this state shall have antifraud initiatives reasonably calculated to detect, prosecute, and prevent fraudulent insurance acts, including a written antifraud plan. This plan shall be furnished to the commissioner, upon request. II. Antifraud plans submitted to the commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action. III. The provisions of RSA 400-A:36, III shall apply to the furnishing of information by an insurer to the unit or to any other insurer involved in the prevention or detection of fraudulent insurance acts. IV. If the commissioner finds that an insurer licensed to do business in New Hampshire has failed to execute an antifraud plan, the commissioner may issue a fine or suspend the right of the insurer to do business in this state until such time as that insurer comes into compliance with the provisions of this chapter.
4601. Antifraud Plans
4601.01 Purpose. The purpose of this chapter is to establish standards for the insurance fraud investigation unit, insurance company special investigative unit (SIU), and any other interested parties regarding the preparation of an antifraud plan that meets the mandated requirements for developing an antifraud plan pursuant to RSA 417:30.
Ins 4601.02 Applicability and Scope. This chapter shall be applicable to every insurance company licensed to write direct business in this state, except for insurance companies writing only credit, home warranty, travel, or title insurance.
Ins 4601.03 Definitions.
- (a) “Commissioner” means the insurance commissioner.
- (b) “Department” means the New Hampshire Insurance Department.
- (c) “National Association of Insurance Commissioners (NAIC)” means the organization comprised of elected or appointed state government officials of the 50 states, the District of Columbia and the U.S. territories whose departments regulate the business of insurance.
- (d) “National Health Care Antifraud Association (NHCAA)” means the organization founded in 1985 by private health insurers and federal and state governments whose activities focus exclusively on fighting health care fraud.
- (e) “National Insurance Crime Bureau (NCIB)” means the not-for-profit organization created by the insurance industry to address insurance-related crime.
- (f) “Online Fraud Reporting System (OFRS)” means the online fraud reporting system developed by the NAIC for regulators, consumers and insurance industry to report insurance fraud.
- (g) “Special Investigations Unit (SIU)” means the non-law enforcement units of an insurer or insurer affiliated entity whose sole mission is to detect, deter, defeat, and report insurance fraud. An SIU includes any of the following:
o    (1) An internal unit of the insurance company;
o    (2) An external unit of more than one insurance company that is part of the same insurance holding company system; or
o    (3) An independent third-party unit under contract with an insurer or insurers.
Ins 4601.04 Antifraud Plans Submitted Upon Request.
- (a) An insurer, if requested by the department, subject to RSA 408-D:14 and RSA 417:30, shall submit to the commissioner a detailed description of the company’s antifraud plan.
- (b)Â Any antifraud plans so submitted shall be subject to review by the commissioner.
Ins 4601.05 Antifraud Plan Requirements.
- (a) The antifraud plan shall be an acknowledgement by the insurer and its SIU that they have established criteria that shall be used to detect suspicious or fraudulent insurance activity relating to the different types of insurance offered by that insurer.
- (b) One SIU antifraud plan may cover several insurer affiliated entities if one SIU has the fraud investigation mission for all entities.
- (c) The following information shall be included in the antifraud plan to satisfy the requirements of this chapter, RSA 408-D:14, and RSA 417:30:
- (1)Â General information requirements including:
- a. An acknowledgment that the SIU has established criteria that shall be used for the investigation of acts of suspected insurance fraud relating to the different types of insurance offered by that insurer;
- b. An acknowledgment 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 were sent directly to the department, with a specific time frame which is consistent with RSA 417:28;
- c. A provision stating whether the SIU is an internal unit or an external or third-party unit;
- d. If the SIU is an internal unit, provide a description of whether the unit is part of the insurer’s claims or underwriting departments, or whether it is separate from such departments;
- e. A written description or chart outlining the organizational arrangement of the insurer’s antifraud positions responsible for the investigation and reporting of possible fraudulent insurance acts, including:
- 1. If the SIU is an internal unit, the insurer shall provide general contact information for the company’s SIU;
- 2. If the SIU is an external unit, the insurer shall provide:
- (i)Â The name of the company or companies used;
- (ii)Â Contact information for the company;
- (iii)Â A company organizational chart; and
- (iv)Â The person or position at the insurer responsible for maintaining contact with the external SIU company; and
- 3. If an external SIU is employed for purposes of surveillance, the insurer shall include a description of the policies and procedures implemented;
- f. A provision where the insurer provides the NAIC individual and group code numbers;
- g. A statement as to whether the insurer has implemented a fraud awareness or outreach program. If the insurer has an awareness or outreach program, a brief description of the program shall be included; and
- h. If the SIU is a third-party, a description of the insurer’s policies and procedures for ensuring that the third-party unit fulfills its contractual obligations to the insurer and a copy of the contract with the third party vendor;
- (2) Prevention, detection, and investigation of fraud information, including:
- a. A description of the insurer’s corporate policies for preventing fraudulent insurance acts by its policy holders;
- b. A description of the insurer’s established fraud detection procedures, such as technology and other detection procedures;
- c. A description of the internal referral criteria used in reporting suspicious claims of insurance fraud for investigation by the SIU;
- d. A description of the SIU investigation program, such as by business line, external form claims adjustment, vendor management standard, operating procedures; and
- e. A description of the insurer’s policies and procedures for referring suspicious or fraudulent activity from the claims or underwriting departments to the SIU;
- (3) Reporting of fraud information, including:
- a. A description of the insurer’s reporting procedures for the mandatory reporting of possible fraudulent insurance acts to the commissioner pursuant to RSA 408-D:14, RSA 417:28, and RSA 417:30;
- b. A description of the insurer’s criteria or threshold for reporting fraud to the commissioner; and
- c. A description of the insurer’s means of submission of reports of suspected fraud to the commissioner, such as through the NAIC, OFRS, NICB, NHCAA, electronic state system, or other means;
- (4)Â Education and training information, including, if applicable, a description of the insurer’s plan for antifraud education and training initiatives of any personnel involved in antifraud related efforts. Such description shall include:
- a. The internal positions the insurer offers regular education and training, such as underwriters, adjusters, claims representatives, appointment agents, and attorneys, etc.;
- b. If the training will be internal or external;
- c. Number of hours expected per year; and
- d. If training includes ethics, false claims, or other legal-related issues;
- (5) Internal fraud detection and prevention information, including:
- a. A description of the insurer’s internal fraud detection policy for employees, consultants, or others, such as underwriters, claims representatives, appointed agents, etc.; and
- b. A description of the insurer’s internal fraud reporting system.
Ins 4601.06 Regulatory Compliance. Pursuant to RSA 417:30, the department shall review insurer antifraud plans, as needed, in order to determine compliance with appropriate state laws. Further, the department shall, in accordance with RSA 417:30, IV, take appropriate administrative action against an insurer that fails to comply with the mandated requirements or state laws.
Ins 4601.07 Confidentiality of Antifraud Plans. Any requested submission of required information shall not constitute a waiver of an insurer’s privilege, trade secret, confidentiality, or any proprietary interest in its antifraud plan or its antifraud related policies and procedures. The commissioner shall maintain the antifraud plan as confidential. Submitted plans shall not be subject to RSA 91-A, if submitted properly under the state statutes or rules which would afford protection of these materials under RSA 408-D:14 and RSA 417:30, II.
Ins 4601.08 Waiver of Rules.
- (a)Â The commissioner, upon the commissioner’s own initiative or upon request by an insurer, shall waive any requirement of this chapter if such waiver does not contradict the objective or intent of the rule and:
- (1)Â Applying the rule provision would cause confusion or would be misleading to consumers;
- (2)Â The rule provision is in whole or in part inapplicable to the given circumstances;
- (3)Â There are specific circumstances unique to the situation such that strict compliance with the rule would be onerous without promoting the objective or intent of the rule provision; or
- (4)Â Any other similar extenuating circumstances exist such that application of an alternative standard or procedure better promotes the objective or intent of the rule provision.
- (b)Â No requirement prescribed by statute shall be waived unless expressly authorized by law.
- (c)Â Any person or entity seeking a waiver shall make a request in writing.
- (d)Â A request for a waiver shall specify the basis for the waiver and proposed alternative, if any.
17:33A-15. Filing of plan for prevention, detection of fraudulent health, auto insurance claims 1. a. Every insurer writing health insurance or private passenger automobile insurance in this State shall file with the commissioner a plan for the prevention and detection of fraudulent insurance applications and claims. The plan shall be deemed approved by the commissioner if not affirmatively approved or disapproved by the commissioner within 90 days of the date of filing. The commissioner may call upon the expertise of the director in his review of plans filed pursuant to this subsection. The commissioner may request such amendments to the plan as he deems necessary. Any subsequent amendments to a plan filed with and approved by the commissioner shall be submitted for filing and deemed approved if not affirmatively approved or disapproved within 90 days from the filing date. b. The implementation of plans filed and approved pursuant to subsection a. of this section shall be monitored by the division. The division shall promptly notify the Attorney General of any evidence of criminal activity encountered in the course of monitoring the implementation and execution of the plans. Each insurer writing health insurance or private passenger automobile insurance in this State shall report to the director on an annual basis, on January 1st of each year, on the experience in implementing its fraud prevention plan. 11:16-6.1 Purpose and scope (a) This subchapter sets forth the standards for plan for the prevention and detection of fraudulent insurance applications and claims filed for approval pursuant to N.J.S.A. 17:33A-15 by insurers which transact the business of private passenger automobile insurance or health insurance this State. These provisions apply to all insurers that transact the business of private passenger automobile insurance in New Jersey, including both personal and commercial coverage; and to all insurers transacting the business of health insurance as sets forth in N.J.S.A. 17:33A-3 and N.J.A.C. 11:16-6.2. (b) The subchapter also sets forth the reporting standards and forms necessary to refer insurance fraud matters to the Office of Insurance Fraud Prosecutor (“OIFP”). These provisions apply to all insurers as defined by N.J.S.A. 17:33A-3 and N.J.A.C. 11:16-6.2 including those with PAIP and CAIP assignments. 11:16-6.2 Definitions The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise: “Application” means any document that contains the minimum information necessary as set forth at N.J.A.C. 11:3-44.3(a) to determine whether an applicant is an eligible person or is used in any way by the insurer to rate or underwrite a policy, including the coverage of selection form and renewal questionnaire as provided at N.J.A.C. 11:3-15.7 and 11:3-8 and, if requested, a copy of the applicant’s driver’s license, a copy of the motor vehicle registration of the principal vehicle to be insured and any additional proof of New Jersey residency. The term “application” shall also mean those signed forms, data, reports, analysis and other documents supplied in support of an application when requested by an insurer or by any other person, and/or supplied by the insured/applicant, or other person(s), seeking coverage under a policy or plan of health insurance that is provided to or used by an insurer in assessing the risk, or premium, or which is relied upon by the insurer in agreeing to provide coverage under the policy or plan, including but not limited to that information submitted in accordance with N.J.A.C. 11:4-16.7, 11:20-4.1 and 11:21-6.1. “Commissioner” means the Commissioner of the New Jersey Department of Banking and Insurance. “DAFC” means the Division of Anti-Fraud Compliance in the Department of Banking and Insurance. “Department” means the New Jersey Department of Banking and Insurance. “Eligible person” means an individual who meets the qualifications set forth in N.J.A.C. 11:3-34. “Fraud and misrepresentation” means the knowing misrepresentation of any material fact in a claim or application or the knowing failure to disclose any material fact in a claim or application which, if properly revealed or disclosed, would change the premium; either would affect the placement or underwriting of the risk, the assignment in the insurer’s rating plan, or affect the payment of a claim. “Fraud and prevention detection plan” or “plan” means an insurer’s plan for the prevention and detection of fraudulent insurance applications and claims. “Health insurance” means a contract or agreement whereby an insurer is obligated to pay or allow a benefit of pecuniary value with respect to the bodily injury, disablement, sickness, death by accident or accidental means of a human being, or because of any expense relating thereto, or because of any expense incurred in prevention of sickness, and includes every risk pertaining to any of the enumerated risks. Health insurance does not include any administrative services only (ASO) contracts, workers’ compensation coverage, or stop-loss coverage. “Insured lives” means the actual number of New Jersey residents entitled to receive benefits under a contract delivered or issued for delivery in this State. “Insurer” means any person or entity authorized to transact the business of private passenger automobile insurance in New Jersey, whether in accordance with a personal lines or commercial lines rating system, and includes a group of affiliated companies, and the Property-Liability Insurance Guaranty Association established pursuant to N.J.S.A. 17:30A-1 et seq. when performing its statutory function. “Insurer” pursuant to N.J.S.A. 17:33A-3 (health insurance) also means: 1. Any corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd’s insurer, fraternal benefit society or other person engaged in the business of insurance pursuant to N.J.S.A. 17:17-1 et seq. or 17B:17-1 et seq.); 2. Any medical service corporation operating pursuant to N.J.S.A. 17:48A-1 et seq.; 3. Any hospital service corporation operating pursuant to N.J.S.A. 17:48-1 et seq.; 4. Any health service corporation operating pursuant to N.J.S.A. 17:48E-1 et seq.; 5. Any dental service corporation operating pursuant to N.J.S.A. 17:48C-1 et seq.; 6. Any dental plan organization operating pursuant to N.J.S.A. 17:48D-1 et seq.; “OIFP” means the Office of the Insurance Fraud Prosecutor in the Division of Criminal Justice in the Department of Law and Public Safety. “Special Investigations Unit” or “SIU” means the functional group established by an insurer to carry out the duties set forth in N.J.A.C. 11:16-6.4(a). “Stop-loss or excess risk insurance” means insurance designed to reimburse a self-funded arrangement for catastrophic and unexpected expenses exceeding specified per person retention limits and/or aggregate retention limit, wherein neither employees nor other individuals are third party beneficiaries under the policy, contract or plan. 11:16-6.3 General requirements and filing format (a) All insurers shall file for approval a fraud prevention and detection plan (“plan”) in accordance with N.J.S.A. 17:33A-15 and this subchapter. No insurer shall use or implement any plan that is not filed and approved. (b) Insurers shall submit their plan on 8 1/2 by 11-inch paper. The first page shall show the filer’s company name, the filer’s identifying number for this filing, National Association of Insurance Commissioners (“NAIC”) company number(s), and NAIC group number. (c) Insurers shall file their plan with the Department at the following address: Fraud Prevention and Detection Plan New Jersey Department of Banking and Insurance Division of Anti-Fraud Compliance P.O. Box 324 Trenton, N.J. 08625-0324
A. Within six months of the effective date of the Insurance Fraud Act and by July 1 of each succeeding year every insurer who in the previous calendar year reported ten million dollars ($10,000,000) or more in direct written premiums in New Mexico shall establish, prepare, implement and submit to the superintendent an anti-fraud plan that is reasonably calculated to detect, prosecute and prevent insurance fraud. Any subsequent amendments to the plan shall be submitted to the superintendent at the time they are adopted. B. Each insurer’s anti-fraud plan shall outline, at a minimum, specific procedures, appropriate to the type of insurance the insurer writes, to: (1) prevent, detect and investigate all forms of insurance fraud; (2) educate appropriate employees on fraud detection and the insurer’s anti-fraud plan; (3) provide for the hiring or contracting of fraud investigators; (4) report insurance fraud to appropriate law enforcement and regulatory authorities; and (5) pursue restitution, where appropriate, for financial loss caused by insurance fraud. C. The superintendent may review each insurer’s anti-fraud plan to determine if it adequately complies with the requirements of this section. The superintendent may examine the insurer to assure its compliance with anti-fraud plans submitted to the superintendent. The superintendent may require reasonable modifications to the insurer’s anti-fraud plan or may require other reasonable remedial action if the review or examination reveals substantial noncompliance with the plan.
§572.1. Insurance anti-fraud plan Each authorized insurer and each health maintenance organization licensed to operate in this state shall prepare, implement, and maintain an insurance anti-fraud plan for the insurer’s or health maintenance organization’s operations in this state. The insurance anti-fraud plan utilized by each authorized insurer and each health maintenance organization in this state shall be filed with the commissioner of insurance and shall outline specific procedures, actions, and safeguards that are applicable, relevant, and appropriate to the type of insurance the authorized insurer writes or the type of coverage offered by the health maintenance organization in this state and shall include how the authorized insurer or health maintenance organization will: Detect, investigate, and prevent all forms of insurance fraud, including fraud involving the insurer’s or health maintenance organization’s employees or agents; fraud resulting from misrepresentations in the application, renewal, or rating of insurance policies; fraudulent claims; and security of the insurer’s or health maintenance organization’s data processing systems. Educate appropriate employees on fraud detection and the insurer’s or health maintenance organization’s anti-fraud plan. Provide for fraud investigations, whether through the use of internal fraud investigators or third-party contractors. Report a suspected fraudulent insurance act, as defined by R.S. 9 22:1923(1), to the Department of Insurance as well as appropriate law enforcement and other regulatory authorities engaged in the investigation and prosecution of insurance fraud. (5) Pursue restitution for financial loss caused by insurance fraud, when applicable, relevant, and appropriate. The commissioner shall review the insurance anti-fraud plan submitted by each authorized insurer and each health maintenance organization to determine compliance with the requirements of this Section. D. The commissioner shall have the authority to investigate and examine the records and operations of each authorized insurer and each health maintenance organization to determine if the insurer or health maintenance organization has implemented and maintained compliance with the insurance anti-fraud plan. E. The commissioner is authorized to direct any authorized insurer or health maintenance organization to make any modification to the insurer’s or health maintenance organization’s insurance anti-fraud plan necessary to obtain and maintain compliance with the requirements of this Section, and the commissioner may require any other reasonable remedial action to the insurer’s or health maintenance organization’s insurance anti-fraud plan if the investigation and examination reveals substantial noncompliance by the insurer or health maintenance organization with the terms of the insurer’s or health maintenance organization’s insurance anti-fraud plan. F. The anti-fraud plan and any summary report shall be filed with the commissioner on or before April first of each calendar year. Either on a calendar year basis or on whatever other interval he deems appropriate, the commissioner is authorized to require that each authorized insurer and each health maintenance organization file a summary report of any material change to the insurance anti- fraud plan, including the total number of claims and the number of claims referred to the commissioner as suspicious, and the commissioner is authorized to direct each insurer and each health maintenance organization as to the format of the summary report. G. The insurance anti-fraud plan submitted to the department, as well as the summary report of the insurer’s or health maintenance organization’s insurance anti-fraud activities and results, are not public records and are exempt pursuant to R.S. 44:1 et seq., and specifically R.S. 44:4.1(B)(10), shall be and are hereby declared to be company proprietary and business confidential records and not subject to public examination or subpoena.
5. Insurer antifraud plans. Within 6 months of the effective date of this Act, every insurer writing direct insurance shall prepare and implement an antifraud plan. This subsection does not apply to any agency, producer or other person acting on behalf of an insurer. The superintendent may review an insurer’s antifraud plan to determine if the plan complies with the requirements of this subsection. The antifraud plan must outline specific procedures, appropriate to the lines of insurance the insurer writes in the State, to: A. Prevent, detect and investigate all forms of insurance fraud; B. Educate appropriate employees on the antifraud plan and fraud detection; C. Provide for the hiring of or contracting for fraud investigators; and D. Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud.
Regulation — 09.31.17 .04 – Procedures and Requirements A. Antifraud Plan (1) An insurer authorized to write insurance business in this State shall institute, implement, and maintain an insurance antifraud plan. B. Contents of Antifraud Plan An antifraud plan shall: (1) Contain provisions for educating and training an insurer’s employees in the detection of insurance fraud; (2) Provide for methods and procedures concerning the investigation of suspicious claims; and (3) Apply to but not limited to: (a) Claims fraud, (b) Application fraud, (c) Agent fraud, (d) Broker fraud; (e) Third party administrator fraud, and (f) Internal fraud. 0.5 – Plan Components A. Education/Training. (1) An antifraud plan shall contain procedures for the provision of education or training, or both, to the insurer’s employees regarding the detection of insurance fraud. (2) Training in the recognition and referral of suspicious claims shall be: (a) required of new and existing claim personnel, underwriters, auditors, agents, and consumer service personnel; and (b) offered to independent agents or brokers who have appointments with the company. (3) At a minimum, the educational components an antifraud plans shall address the following: (a) courses of instruction shall be: (i) designed to address specific aspects of fraud associated with a company’s product line, and (ii) at least 2 hours in duration. (b) Personnel shall be presented with updated material at the entrance level and at least once every 2 years in conjunction with continuing education standards or as a company policy; (c) A new employee shall receive the regulated education and training regarding the detection of fraud within 6 months of the effective date of employment; and (d) Training programs may be developed and conducted either by internal personnel or by outside contractors. B. Detection (1) An antifraud plan shall have provisions regarding the early detection of all areas of fraud including, but not limited to: (a) Embezzlement and internal theft; (b) Underwriting and application fraud; (c) Theft and misappropriation of premiums by agents; (d) Claims fraud; and (e) Application fraud. (2) The antifraud plan shall delineate the methods or approaches, or both, that will be utilized in detecting fraud. (3) An authorized insurer shall: (a) designate an individual or individuals, or a specific unit, either in-house or outside, to be responsible for coordinating the detection, referral, and investigation of suspected fraudulent activity; (b) include the designation in the antifraud plan; and (c) submit amendments to the designation to the Administration. (4) Fraud detection guides shall be prepared, published, and maintained to assist claim personnel, underwriters, and agents in the identification, detection, and handling of suspicious claims. C. Investigation (1) An antifraud plan shall contain: (a) procedures for handling fraud complaints; (b) procedures that are to be followed when instances of suspected fraud have been detect, evaluated, and found to warrant a full investigation; (c) the requirement that the company representative responsible for the conduct and oversight of fraud investigations assign the matter for investigation; (d) the designation of the individuals responsible for conducting investigations on behalf of the insurer including the individuals responsible for providing the notifications required by Sec. C(1)(g) of this regulation; (e) guidelines and procedures for conducting investigations and cooperating with the Insurance Fraud Division or other law enforcement agency which is conducting a criminal investigation if in-house staff is utilized; (f) written considerations as to work product and court room testimony; and (g) guidelines and procedures for notifying the appropriate law enforcement agency, including the Insurance Fraud Division of the Administration. (2) Investigators (a) a company may maintain an in-house staff of investigators or contract with an outside firm. (b) if an outside firm is used, the firm shall comply with all Maryland licensing laws and regulations to the extent that they are applicable. (D) Auditing (1) An antifraud plan shall contain procedures regarding the auditing of agents by the company. (2) The auditing procedures shall provide for both routine auditing and random audits. (3) If an irregularity is discovered during an audit, the antifraud plan shall require that the duly authorized company representative who conducts or oversees investigations be notified immediately.
This administrative regulation establishes insurer requirements and a comprehensive process for reporting and investigating fraudulent insurance acts. Section 1. Definitions. “Division” is defined by KRS 304.47-010(6). “Special investigative unit” or “SIU” means a unit to investigate fraudulent insurance acts as required by KRS 304.47-080. Section 2. Scope. This administrative regulation shall apply to all insurers admitted to do business in the Commonwealth that are not otherwise exempted by KRS 304.47-080(1). Section 3. Primary Anti-fraud Contacts. To facilitate communication with the division, an insurer shall designate two (2) primary contact persons, one (1) of whom shall be the head of the SIU, who shall communicate with the division on matters relating to the reporting, investigation, and prosecution of suspected fraudulent insurance acts, as defined in KRS 304.47-020. Section 4. Special Investigative Units and Anti-fraud Plans. An insurer shall maintain an SIU to fulfill the requirements of KRS 304.47-080. In conjunction with its SIU, an insurer shall: (a) Implement systematic and effective methods to detect and investigate suspected fraudulent insurance claims; (b) Educate and train all claims handlers to identify possible insurance fraud; (c) Develop policies for the SIU to cooperate, coordinate, and communicate with: The insurer’s claims handlers, legal personnel, technical support personnel, and database support personnel; and The division and other relevant law enforcement agencies; and (d) Develop and submit to the division a written anti-fraud plan, which shall include: Acknowledgment of duty to report to the division, including mandatory reporting of the determination that a suspected fraudulent act has been committed within fourteen (14) days; SIU contact information; SIU investigative ethics; Procedures to detect and deter fraud; and Continuing education plans for SIU staff. Section 5. Compliance Report. (1) Within ninety (90) days of admission, and at least once every two (2) years, an insurer shall submit to the division a written report setting forth the manner in which the insurer is complying with Section 4 of this administrative regulation. The report shall also include: (a) The total number of SIU investigative staff responsible for cases in Kentucky, and whether any staff member also investigate cases in other jurisdictions; and (b)1. If the insurer formed the SIU in house and solely governs it, the year that the SIU was formed; or 2. If the insurer has contracted SIU services through another company, the identity of the company providing SIU services and the initial year of the contract between the insurer and the company. (2) Within thirty (30) days of a material change of the information provided in the compliance report, the insurer shall amend the compliance report and resubmit it to the division. Section 6. Reporting Fraudulent Insurance Acts. (1) All persons identified in KRS 304.47-050(2) shall report suspected fraudulent insurance acts to the division within fourteen (14) days of determination that a suspected fraudulent act has been committed. Reports submitted to a person or entity other than the division shall not satisfy the reporting duty of KRS 304.47-050(2). Reports shall be submitted by: Completing a report on the department’s electronic services portal at https://insurance.ky.gov/eservices/default.aspx; or Submitting a completed Uniform Suspected Insurance Fraud Reporting Form. (2) All persons identified in KRS 304.47-050(1) may report suspected fraudulent insurance acts to the division by: Completing a report on the department’s electronic services portal at https://insurance.ky.gov/eservices/default.aspx; or Submitting a completed Uniform Suspected Insurance Fraud Reporting Form. Section 7. Incorporation by Reference. The “Uniform Suspected Insurance Fraud Reporting Form,” 7/2019, is incorporated by reference.