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. Insurance claims forms shall contain a statement in a form approved by the commissioner that clearly states in substance the following: “Any person who knowingly files a statement of claim containing any false or misleading information is subject to criminal and civil penalties.” b. (Deleted by P.L. 1987, c. 342) c. Insurance application forms shall contain a statement in a form approved by the commissioner that clearly states in substance the following: “Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties.” NJAC 11:16-1.2 (a) Insurers shall either place on or attach to all claim forms the following warning: “Any person who knowingly files a a statement of claim containing any false or misleading information is subject to criminal and civil penalties.” (b) Pursuant to NJSA 17:33A-6, all applications for insurance shall prominently and clearly contain the following statement: “Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties.” (c) In lieu of the statement in (a) or (b) above, insurers may use a substantially similar statement with the prior approval of the Commissioner. 1. The Commissioner may approve the use of a statement substantially similar to that set forth above upon finding that the statement properly describes the prohibited conduct and references both criminal and civil penalties. 2. Request for approval of substantially similar statements shall be directed to the Department at the following address: Division of Anti Fraud Compliance New Jersey Department of Banking and Insurance PO Box 324 Trenton, NJ 08625-0324
“Any person who believes that a violation of this act has been or is being made shall notify the division immediately after discovery of the alleged violation of this act and shall send to the division, on a form and in a manner prescribed by the commissioner, the information requested and such additional information relative to the alleged violation as the division may require.”
New Jersey Pre-insurance Inspection Photograph required — Yes Grace Period (days) — 7 Exemptions/Waivers Existing Policyholder (years) — 3 Renewal Policy — Yes New Cars — Yes Vehicle Age — 7
§ 11:16-6.5 Training program and manual for the prevention and detection of fraud (a) The requirements with respect to fraud prevention and detection training programs are set forth in this subsection. Except for automobile insurers that insure fewer than 2,500 New Jersey automobile policies and health insurers that insure fewer than 10,000 lives, the plan shall provide anti-fraud education for SIU investigators, SIU specialists, claims adjusters, and underwriters that shall include a detailed and comprehensive program of insurance fraud awareness and education to prepare claims adjusting and underwriting personnel for insurance fraud prevention and detection. 1. The training program shall include Basic Entry Level Training and Continuing Education Training for all adjusters, claims processors, underwriters, SIU investigators, and SIU specialists, and shall be submitted to and approved by the Department. The Continuing Education Training instructions format may be classroom instruction, self-guided instruction, videotape, seminar, computer based, or by any other means. 2. The training programs referred to in (a)1 above shall be provided as follows: i. In the case of automobile insurers, training shall include, but not be limited to, the following areas as appropriate: automobile theft investigations, automobile property damage and fire investigations, personal injury protection investigations, bodily injury liability claim investigation, statutory requirements for fraud referrals, techniques for the identification of fraudulent applications for coverage, insurance rate making practices, tier rating plans used by the insurer, PIP medical expense benefits and medical treatment protocols and precertification plans, and current indicators of fraud. ii. In the case of health insurers, training shall include, but not be limited to, the following areas as appropriate: overcharging and overpayment detection, claims processing guidelines, medical coding, duplicate bills, excessive charges, unnecessary services or supplies, over-utilization, services never rendered, miscoded or misleading claim information, hospital inpatient or outpatient billing abuse or inappropriate commitment or confinement, abusive or fraudulent referrals, statutory requirements dealing with fraud referrals, techniques for the identification of fraudulent applications for coverage, the type, methods of service and operating procedures of various health insurers, and current indicators of fraud. iii. Each company shall submit for approval the Basic Entry Level Training, which shall be no less than nine hours of classroom instruction for SIU personnel and no less than four and one-half hours of classroom instruction for non-SIU personnel. Continuing Education Training shall be no less than nine hours of training per year for SIU personnel and no less than two hours per year for claims and underwriting personnel. Basic Entry Level Training shall be given to all employees within 180 days from the commencement of their employment at each of these positions: underwriters, adjusters, claims processors, SIU investigators, or SIU specialists. The no less than two hours of continuing education training provided to non-SIU personnel shall emphasize the responsibility of all employees to identify and report indications of internal and external fraud to the proper authority. (b) The requirements with respect to fraud prevention and detection procedures manuals are set forth in this subsection. Except for insurers which insure fewer than 2,500 New Jersey automobile policies, or health insurers fewer than 10,000 lives, the plan shall provide a fraud prevention and detection procedure manual and disseminate it to, or make it available to, as appropriate, all SIU, claims adjusters, and underwriting personnel. The fraud prevention and detection procedure manual shall include, at a minimum, the following: 1. Information for claim adjusters, underwriting personnel, SIU investigators and SIU specialists regarding general investigation guidelines; unfair claims practices; conducting interviews; report writing; information disclosure; law enforcement relations; and the New Jersey Insurance Fraud Prevention Act; 2. The process to be employed for reporting to OIFP when specific facts and circumstances are identified, in connection with a claim or application, which upon further SIU investigation leads to a reasonable conclusion that a violation of N.J.S.A. 17:33A-4 has occurred; 3. For automobile insurers, the “fraud indicators” used for automobile theft, automobile physical damage fraud, personal injury claims fraud, bodily injury claims fraud, and application fraud; 4. For health insurers, “fraud factors” or “indicators” for health fraud, application fraud, and claims fraud; 5. The duties and functions of the SIU; 6. The procedure for referral of a claim or application to the SIU; 7. The post-referral procedure for communication between the claims unit and/or the underwriting unit and the SIU regarding claim resolution and file closure; 8. All update pages for the protocol, training program, and procedure manual shall include a description of the content being updated, the page number, and its effective date; 9. Hard copy procedure manuals shall include version/filing numbers in footers along with page numbering and a table of contents; 10. Internet-based procedure manuals shall provide home pages displaying hyperlinks or other navigation to the required content; and 11. Updates shall be referenced in hard copy and Internet manuals. (c) As used in (b) above: 1. “Unfair claims practices” is understood to include copies of or valid hyperlinks to both: i. N.J.S.A. 17B:30-13 and N.J.A.C. 11:2-17, Unfair Claim Settlement Practices, (health insurers); and ii. N.J.S.A. 17:29B-4(9) and N.J.A.C. 11:2-17, Unfair Claim Settlement Practices, (property/casualty); 2. “New Jersey Insurance Fraud Prevention Act” is understood to include copies of or valid hyperlinks to both: i. N.J.S.A. 17:33A-1 et seq., New Jersey Insurance Fraud Prevention Act; and ii. N.J.A.C. 11:16-6, Fraud Prevention and Detection; and 3. “Information disclosure” is understood to include copies of or valid hyperlinks to: i. P.L. 106-102, Gramm-Leach-Bliley; ii. P.L. 104-191, Health Insurance Portability and Accountability Act of 1996; iii. N.J.S.A. 56:11-44 et seq., Identity Theft Prevention Act; iv. N.J.S.A. 17:23A-13, Disclosure limitations and conditions; and v. N.J.A.C. 13:45F, Identity Theft. (d) Specimen formats of the anti-fraud prevention and detection protocol, anti-fraud prevention and detection training program, and anti-fraud prevention and detection procedure manual are available for viewing on-line at http://www.state.nj.us/dobi/division_consumers/insurance/mceu.html.
11:16-6.4 Special Investigations Unit (SIU)-duties, qualifications, and composition ( a) Except for automobile insurers that insure fewer than 2,500 New Jersey automobile policies, and health insurers that insure fewer than 10,000 lives, the plan in accordance with N.J.A.C. 11:16-6.3 shall establish a full-time Special Investigations Unit (“SIU”). (b) The SIU shall be responsible for the following: 1. Conducting investigations of claims referred by the claim personnel or applications referred by underwriting personnel whenever the adjuster, processor, or underwriter identifies specific facts and circumstances which, upon further SIU investigation, may lead to a reasonable conclusion that a violation of N.J.A.C. 17:33A-4 has occurred; 2. Providing liaison with OIFP, other law enforcement personnel and the DAFC; 3. Providing in-service training to claims personnel, underwriting personnel, and adjusters in accordance with the provisions of N.J.A.C. 1:16-6.5; 4. Maintaining a database of fraudulent claims and application fraud which shall contain, at a minimum, the names, addresses and other identifying information regarding all parties to the investigation referred to in (b) 1 above; 5. Informing insurance underwriters of ineligible risks by reason of prior fraudulent activities from the database in (b)4 above; 6. Identifying persons and organizations that are involved in suspicious claim activity and application fraud, as described in (b)1 above; 7. Referring matters to OIFP in accordance with N.J.A.C. 11:16-6.6(b) and N.J.A.C. 11:16-6.7 and providing notice of suspicious claims in accordance with N.J.A.C. 11:16-6.6(c); and 8. Ensuring that all evidence on matters referred to the SIU including, but not limited to, checks issued in payment of claims, taped statements, original receipts, and original documents submitted by a person or entity in support of or in opposition of a claim applicant, are identified, collected and preserved in order to be turned over to OIFP in connection with the referral of cases to OIFP. (c) The SIU shall have the following composition: 1. SIU investigators and SIU specialists shall be a separate unit from the claims adjusting or underwriting function. For purposes of this paragraph, it shall not violate this provision if the SIU issues a check paying a claim or denies payment of a claim so long as: i. The SIU personnel are a separate and distinct unit and ii. When closing the file at the completion of the investigation, the SIU records its findings in writing together with its recommendations to pay or deny the claim with the reasons. 2. Automobile insurers shall employ at least one SIU investigator or SIU specialist (when permitted by N.J.A.C. 11:16-6.4(d)2) for each 30,000 New Jersey automobile policies serviced. 3. Health insurers offering comprehensive benefits contracts shall employ at least one SIU investigator or SIU specialist (when permitted by N.J.A.C. 11:16-6.4(d)2) for every 60,000 insured lives. 4. Health insurers offering limited benefit contracts shall employ at least one SIU or SIU specialist (when permitted by NJAC 11:16-6.4(d)2) for every 250,000 insured lives. Limited benefits contracts shall include, but not be limited to, the following: accident only; credit; disability; long-term care; Medicare supplement; dental only; vision only; insurance issued as a supplement to liability insurance; and any other supplemental hospital indemnity benefits. (d) Qualifications of SIU investigators and specialists shall be as follows: 1. SIU investigators shall have at least one of the following: i. A Bachelor’s degree; ii. An Associate’s degree plus a minimum of two years experience with insurance related employment; iii. A minimum of four years of experience with insurance related employment; or iv. A minimum of five years of law enforcement experience. 2. When approved by the Department in the plan, an insurer shall be permitted to employ a limited number of SIU specialists who shall possess unique qualifications by way of training, technical skill, and/or experience to investigate and identify cases of fraud, but lack the specific educational requirements set forth in (d)1 above, to be SIU investigators. (e) The plan may provide that the functions of the SIU may be assigned to an outside vendor or third party administrator. In such case, the plan shall provide that the outside vendor or third party administrator shall be also be responsible together with the insurer, for compliance with NJAC 11:16-6. § 11:16-6.5 Training program and manual for the prevention and detection of fraud (a) The requirements with respect to fraud prevention and detection training programs are set forth in this subsection. Except for automobile insurers that insure fewer than 2,500 New Jersey automobile policies and health insurers that insure fewer than 10,000 lives, the plan shall provide anti-fraud education for SIU investigators, SIU specialists, claims adjusters, and underwriters that shall include a detailed and comprehensive program of insurance fraud awareness and education to prepare claims adjusting and underwriting personnel for insurance fraud prevention and detection. 1. The training program shall include Basic Entry Level Training and Continuing Education Training for all adjusters, claims processors, underwriters, SIU investigators, and SIU specialists, and shall be submitted to and approved by the Department. The Continuing Education Training instructions format may be classroom instruction, self-guided instruction, videotape, seminar, computer based, or by any other means. 2. The training programs referred to in (a)1 above shall be provided as follows: i. In the case of automobile insurers, training shall include, but not be limited to, the following areas as appropriate: automobile theft investigations, automobile property damage and fire investigations, personal injury protection investigations, bodily injury liability claim investigation, statutory requirements for fraud referrals, techniques for the identification of fraudulent applications for coverage, insurance rate making practices, tier rating plans used by the insurer, PIP medical expense benefits and medical treatment protocols and precertification plans, and current indicators of fraud. ii. In the case of health insurers, training shall include, but not be limited to, the following areas as appropriate: overcharging and overpayment detection, claims processing guidelines, medical coding, duplicate bills, excessive charges, unnecessary services or supplies, over-utilization, services never rendered, miscoded or misleading claim information, hospital inpatient or outpatient billing abuse or inappropriate commitment or confinement, abusive or fraudulent referrals, statutory requirements dealing with fraud referrals, techniques for the identification of fraudulent applications for coverage, the type, methods of service and operating procedures of various health insurers, and current indicators of fraud. iii. Each company shall submit for approval the Basic Entry Level Training, which shall be no less than nine hours of classroom instruction for SIU personnel and no less than four and one-half hours of classroom instruction for non-SIU personnel. Continuing Education Training shall be no less than nine hours of training per year for SIU personnel and no less than two hours per year for claims and underwriting personnel. Basic Entry Level Training shall be given to all employees within 180 days from the commencement of their employment at each of these positions: underwriters, adjusters, claims processors, SIU investigators, or SIU specialists. The no less than two hours of continuing education training provided to non-SIU personnel shall emphasize the responsibility of all employees to identify and report indications of internal and external fraud to the proper authority. (b) The requirements with respect to fraud prevention and detection procedures manuals are set forth in this subsection. Except for insurers which insure fewer than 2,500 New Jersey automobile policies, or health insurers fewer than 10,000 lives, the plan shall provide a fraud prevention and detection procedure manual and disseminate it to, or make it available to, as appropriate, all SIU, claims adjusters, and underwriting personnel. The fraud prevention and detection procedure manual shall include, at a minimum, the following: 1. Information for claim adjusters, underwriting personnel, SIU investigators and SIU specialists regarding general investigation guidelines; unfair claims practices; conducting interviews; report writing; information disclosure; law enforcement relations; and the New Jersey Insurance Fraud Prevention Act; 2. The process to be employed for reporting to OIFP when specific facts and circumstances are identified, in connection with a claim or application, which upon further SIU investigation leads to a reasonable conclusion that a violation of N.J.S.A. 17:33A-4 has occurred; 3. For automobile insurers, the “fraud indicators” used for automobile theft, automobile physical damage fraud, personal injury claims fraud, bodily injury claims fraud, and application fraud; 4. For health insurers, “fraud factors” or “indicators” for health fraud, application fraud, and claims fraud; 5. The duties and functions of the SIU; 6. The procedure for referral of a claim or application to the SIU; 7. The post-referral procedure for communication between the claims unit and/or the underwriting unit and the SIU regarding claim resolution and file closure; 8. All update pages for the protocol, training program, and procedure manual shall include a description of the content being updated, the page number, and its effective date; 9. Hard copy procedure manuals shall include version/filing numbers in footers along with page numbering and a table of contents; 10. Internet-based procedure manuals shall provide home pages displaying hyperlinks or other navigation to the required content; and 11. Updates shall be referenced in hard copy and Internet manuals. (c) As used in (b) above: 1. “Unfair claims practices” is understood to include copies of or valid hyperlinks to both: i. N.J.S.A. 17B:30-13 and N.J.A.C. 11:2-17, Unfair Claim Settlement Practices, (health insurers); and ii. N.J.S.A. 17:29B-4(9) and N.J.A.C. 11:2-17, Unfair Claim Settlement Practices, (property/casualty); 2. “New Jersey Insurance Fraud Prevention Act” is understood to include copies of or valid hyperlinks to both: i. N.J.S.A. 17:33A-1 et seq., New Jersey Insurance Fraud Prevention Act; and ii. N.J.A.C. 11:16-6, Fraud Prevention and Detection; and 3. “Information disclosure” is understood to include copies of or valid hyperlinks to: i. P.L. 106-102, Gramm-Leach-Bliley; ii. P.L. 104-191, Health Insurance Portability and Accountability Act of 1996; iii. N.J.S.A. 56:11-44 et seq., Identity Theft Prevention Act; iv. N.J.S.A. 17:23A-13, Disclosure limitations and conditions; and v. N.J.A.C. 13:45F, Identity Theft. (d) Specimen formats of the anti-fraud prevention and detection protocol, anti-fraud prevention and detection training program, and anti-fraud prevention and detection procedure manual are available for viewing on-line at http://www.state.nj.us/dobi/division_consumers/insurance/mceu.html. 11:16-6.6 Fraud prevention and detection plan (a) The plan shall provide for underwriting inquiry to verify that the insured is an eligible person and the policy is properly rated within 60 days of receipt of the application. These underwriting inquiries shall verify the insured’s residency provided by the insured on his or her application for insurance. The plan may provide that these inquires are generally done “in-house” by telephone and by using information from the New Jersey Division of Motor Vehicle Services (or similar agencies in other states) and prior insurers. (b) The following concern referral of application and claims: 1.The plan shall provide that an application or claim shall be referred as a case to OIFP, for further OIFP investigation or other appropriate action, on the prescribed Referral Form (OIFP-1A for Claim Fraud Referral, OIFP-1B for Application Fraud Referral, OIFP-2 for Suspicious Claim/Application Notification, OIFP-3A for Health Claim Fraud Referral, OIFP-3B for Health Application Fraud Referral, and OIFP-4 for Suspicious Health Claim/Application notification incorporated herein by reference in the subchapter Appendix), with all other information required by the form, when the investigation complies with the requirements set forth in N.J.A.C. 11:16-6.7. 2. The plan shall provide that all applications and claims, which meet the standard for referral set forth in N.J.A.C. 11:16-6.7, shall be referred to OIFP by the SIU as soon as practicable, but in no case later than 30 days from when the investigation is complete. 3. The plan shall provide criteria and levels of economic impact for the referral of insurance claims and application fraud in accordance with the requirements of NJAC 11:16-6.7. (c) The plan shall provide that after completion of an SIU investigation, or after identification by an SIU of a pattern of applications or claims, the insurer shall provide notice to OIFP on Notification Form OIFP-2 and for Health insurance Notification on OIFP-4 (incorporated herein by reference in the subchapter Appendix), unless this form is superseded by an electronic reporting form, of instances in which a violation of N.J.S.A. 17:33A-4 is suspected on the basis of fraud factors or indicators, but where sufficient evidence to support a case referral pursuant to N.J.A.C. 11:16-6.7 has not been developed. (d) The plan shall provide that all referrals of application and claims fraud and notifications of suspected application or claims fraud by the insurer to OIFP shall be made by personnel in the insurer’s SIU or other personnel designated in the plan so long as records are kept of all referrals and notifications and the appropriate form is used. (e) Where an insurer contracts any of its SIU functions to an outside vendor or third party administrator in accordance with NJAC 11:16-6.4(e), the plan shall provide the name and address of the outside vendor or third party administrator used by the insurer to conduct investigations or perform SIU functions together with a copy of the contract between the insurer and the outside vendor or third party administrator. (f) The plan may include such other items as the insurer may wish to provide. 11:16-6.7 Referrals to OIFP (a) The plan shall provide that upon completion of its investigation, as described in (d) below, an SIU shall refer cases, on form OIFP-1A, OIFP-1B, OIFP-3A or OIFP-3B which meet the following standard to OIFP: 1. Any application or claim where the facts and circumstances crate a reasonable suspicion that a person or entity has violated N.J.S.A. 17:33A-4: and; 2. There is sufficient independent evidence corroborating the reasonable suspicion described in (a)1 above, from which a person could reasonably conclude that the person or entity has violated N.J.S.A. 17:33A-4. (b) The facts and circumstances referred to in (a)1 above can include, but are not limited to, “fraud indicators” contained in an insurer’s approved plan, and such other facts and circumstances as would lead a reasonable person to suspect that a violation of N.J.S.A. 17:33A-4 has occurred. (c) As referred to in (a)2 above, independent evidence corroborating the reasonable suspicion that a person has violated N.J.S.A. 17:33A-4 includes, but is not limited to: 1. A statement from a witness; 2. Documentary evidence that directly negates a material element of the claim or directly establishes the falsity of a material element of an insurance application; 3. A report of an expert; or 4. Additional apparent misrepresentations tending to negate a possibility that the misrepresentation was merely an error. (d) An investigation shall be complete for purposes of referral to OIFP when all reasonable and appropriate investigative leads and opportunities have been exhausted. When an investigation has identified a pattern of possible violations of N.J.S.A. 17:33A-4, the investigation will be deemed complete for purposes of referral as a case to OIFP when one or more violations included in the identified pattern have been sufficiently investigated and corroborated, in accordance with (a) above for referral to OIFP. 11:16-6.8 Record retention (a) Insurers shall maintain up-to-date and accurate records on their fraud prevention and detection plan, which shall at minimum include those necessary to prepare the report required in (b) below. (b) As of January 1 of each year, insurers shall submit an annual report for the prior calendar year to the Commissioner on DAFC From #1 found in this Appendix. 1. The report referred to in (b) above shall be filed with the Department on or before February 1 of each year and sent to the following address: New Jersey Department of Banking and Insurance Division of Anti-Fraud Compliance PO Box 324 Trenton, N.J. 08625-0324 2. Insurers shall submit the report referred to in (b) above in written copy and on an MS-DOS formatted disk. The disk shall be a 3.5 inch 1.44 MB disk. The information shall be provided in an Access Database provided by DAFC. Insurers may submit a disk, together with a self-addressed stamped diskette mailer to the DAFC. The DAFC will properly format the disk and return to the insurer to facilitate compliance. 3. As an alternative to the filings described in (1) and (2) above, insurers may submit this annual informational filing to the Department at the following e-mail address: DAFC@DOBI.STATE.NJ.US. Insurers can acquire the required Access Database format from the Department by directing a request for the “annual filing template” to the DAFC e-mail address referenced here. 11:16-6.9 Approval and filing of fraud prevention and detection plans (a) An insurer’s fraud prevention and detection 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. (b) The Commissioner may request such amendments to the plan as he or she deems necessary. (c) An insurer must submit amendments to its plan when necessary to achieve compliance with these rules. Any amendments to a plan filed with the Commissioner shall be deemed approved by the Commissioner if not affirmatively approved or disapproved within 90 days of the date of filing. (d) The insurer shall permit the DAFC access to its offices upon reasonable notice and at reasonable hours to conduct an audit of the insurer’s compliance with its fraud prevention plan. Nothing in this section shall be construed as to preclude the DAFC from conducting reviews of an insurer’s compliance with its fraud prevention and detection plan at the office of the DAFC when determined to be necessary by the DAFC. (e) In those instances in which an insurer uses an outside agent, third party administrator or contractor to perform SIU functions or claims investigations, the Plan and contract with the outside vendor or third party administrator shall provide the Department shall be permitted to audit the records, books and documents maintained by the outside contractor or third party administrator in the same manner and fashion as it would be able to examine the books and records in accordance with N.J.S.A. 17:33A-15 and N.J.S.A. 17:23-22. (f) All information included in an insurer’s plan submitted to the DAFC pursuant to this subchapter or any other information including training programs submitted to DAFC pursuant to this subchapter shall be confidential and not subject to public disclosure or inspection. 11:16-6.10 Penalties Failure to comply with the provisions of this subchapter shall subject the insurer to penalties as prescribed by law. 11:16-6.11 Transition No later than 120 days following the adoption of this subchapter, all insurers shall file with the Department a new fraud prevention and detection plan and manual in conformance with these rules. 11:16-6.12 Confidential records and information (a) All information and materials in the possession of the Office of Insurance Fraud Prosecutor concerning the existence or occurrence of insurance fraud or related criminal activities are confidential and privileged against disclosure, and shall not be deemed public records, so as to protect the public interest in the prosecution of insurance fraud, including protecting witness security, the State’s relationship with informants and witnesses, the privacy interests of persons investigated by OIFP where no fraud has been proven and other confidential relationships. (b) The confidentiality which extends to information and materials possessed by the Office of Insurance Fraud Prosecutor with respect to the existence or occurrence of insurance fraud or related criminal activities extends to all papers, documents, reports, evidence and databases, such as investigative reports, referrals, reports or notifications of suspicious claims or applications or suspected insurance fraud, computer maintained databases of such investigative information, and such other materials and information as the Insurance Fraud Prosecutor, on the basis of his experience and exercise of judgment, believes must be kept confidential in order to ensure the orderly investigation and prosecution of insurance fraud. c. Confidentiality of the information and materials in the possession of OIFP shall not preclude OIFP from fulfilling its statutory obligations of working with other law enforcement agencies, the Department of Health and Senior Services, the Department of Human Services, any professional board in the Division of Consumer Affairs in the Department of Law and Public Safety, the Department of Banking and Insurance, the Division of State Police and such local government units as may be necessary or practicable and of coordinating and providing information to and among referring entities on pending cases of suspected insurance fraud, where such action would serve the public interest n facilitating the investigation or prosecution of insurance fraud.
Every rating organization, and every insurer which makes its own rates, shall make rates that are not unreasonably high or inadequate for the safety and soundness of the insurer, and which do not unfairly discriminate between risks in this State involving essentially the same hazards and expense elements, and shall, in rate-making, and in making rating systems: (a) Adopt basic classifications, which shall be used as the basis of all manual, minimum, class, schedule, experience or merit rates; (b) Adopt reasonable standards for construction, for protective facilities, and for other conditions that materially affect the hazard or peril, which shall be applied in the determination or fixing of rates; (c) Give consideration to past and prospective loss experience, including where pertinent, the conflagration and catastrophe hazards, if any, both within and without the State; to all factors reasonably related to the kind of insurance involved; to a reasonable profit for the insurer; and, in the case of participating insurers, to policyholders’ dividends. In the case of fire insurance, consideration shall be given to the latest available experience of the fire insurance business during a period of not less than 5 years preceding the year in which rates are made or revised; (d) Give a rate reduction, to be approved by the commissioner, for fire insurance on structures equipped with operative smoke detection devices of a design approved by the Commissioner of Insurance.
(6) Prepares, presents or causes to be presented to any insurer or other person, or demands or requires the issuance of, a certificate of insurance that contains any false or misleading information concerning the policy of insurance to which the certificate makes reference, or assists, abets, solicits or conspires with another to do any of these acts. As used in this paragraph, “certificate of insurance” means a document or instrument, regardless of how titled or described, that is, or purports to be, prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage. The term shall not include a policy of insurance, insurance binder, policy endorsement, or automobile insurance identification or information card. b. A person or practitioner violates this act if he knowingly assists, conspires with, or urges any person or practitioner to violate any of the provisions of this act.
(a) Any of the following acts in this State, by an insurer not authorized to transact business in this State: (1) the issuance or delivery of contracts of insurance to residents of this State or to corporations authorized to do business therein, (2) the solicitation of applications for such contracts, (3) the collection of premiums, membership fees, assessments or other considerations for such contracts, or (4) any other transaction of business in relation to such contracts of insurance, is equivalent to and shall constitute an appointment by such insurer of the Commissioner of Insurance and his successor or successors in office, to be its true and lawful attorney, upon whom may be served all lawful process and a complaint in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contracts of insurance, and any such act shall be signification of its agreement that such service of process and a complaint is of the same legal force and validity as personal service of the same in this State upon such insurer. (b) Such service of process and a complaint upon the commissioner shall be made by leaving two copies thereof, with the fee prescribed by law, in the hands of the commissioner or someone designated by him in his office, or the clerk of the court may serve the commissioner by mailing such papers to him by registered mail, with the said fee. The commissioner shall forthwith mail by registered mail one of the copies of such process and complaint to the defendant at its last-known principal place of business, and shall keep a record of all papers so served upon him. The commissioner, upon giving notice to the defendant of the service of process as required by this act, shall file with the clerk of the court his certificate of the notice given. Such service of process and a complaint is sufficient, provided notice of such service and a copy of the papers are sent within ten days thereafter by registered mail by plaintiff or plaintiff’s attorney to the defendant at its last-known principal place of business, and the defendant’s receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff’s attorney showing a compliance herewith are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow. (c) Service of process and a complaint in any such action or proceeding shall in addition to the manner provided in subsection (b) of this section be valid if served upon any person within this State who, in this State on behalf of such insurer, is (1) soliciting insurance, or (2) making, issuing or delivering any contract of insurance, or (3) collecting or receiving any premium, membership fee, assessment or other consideration for insurance; and a copy of such process and complaint is sent within ten days thereafter by registered mail by the plaintiff or plaintiff’s attorney to the defendant at the last-known principal place of business of the defendant, and the defendant’s receipt, or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff’s attorney showing a compliance herewith are filed with the clerk of the court in which such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow. (d) No plaintiff shall be entitled to a judgment by default under this section until the expiration of thirty days from date of the filing of the affidavit of compliance. (e) Nothing in this section contained shall limit or abridge the right to serve any process, complaint, notice or demand upon any insurer in any other manner now or hereafter permitted by law.
(6) Prepares, presents or causes to be presented to any insurer or other person, or demands or requires the issuance of, a certificate of insurance that contains any false or misleading information concerning the policy of insurance to which the certificate makes reference, or assists, abets, solicits or conspires with another to do any of these acts. As used in this paragraph, “certificate of insurance” means a document or instrument, regardless of how titled or described, that is, or purports to be, prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage. The term shall not include a policy of insurance, insurance binder, policy endorsement, or automobile insurance identification or information card. e. A person or practitioner violates this act if, for pecuniary gain, for himself or another, he directly or indirectly solicits any person or practitioner to engage, employ or retain either himself or any other person to manage, adjust or prosecute any claim or cause of action, against any person, for damages for negligence, or, for pecuniary gain, for himself or another, directly or indirectly solicits other persons to bring causes of action to recover damages for personal injuries or death, or for pecuniary gain, for himself or another, directly or indirectly solicits other persons to make a claim for personal injury protection benefits pursuant to P.L.1972, c. 70 (C.39:6A-1 et seq.); provided, however, that this subsection shall not apply to any conduct otherwise permitted by law or by rule of the Supreme Court.