(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) Insurers shall submit to the Commissioner on or before March 31 of each year an annual re-port for the prior calendar year on MCEAFC Form #1A and/or #2A, pursuant to instructions and definitions provided in MCEAFC Form #1B (for the completion of #1A) and Form #2B (for the completion of #2A), incorporated herein by reference in the subchapter Appendix. Individual insurers that comprise a group shall submit separate reports. Reports shall be submitted in hard copy or by email to: New Jersey Department of Banking and Insurance Market Conduct Examinations and Anti-Fraud Compliance Unit 20 West State Street PO Box 329 Trenton, NJ 08625-0329 Email: mceafc@dobi.state.nj.us 1. The information shall be submitted in a spreadsheet format established by the Department. Insurers may acquire the required spreadsheet format from the Department: i. By directing an email request for the “Annual Filing Template” to mceafc@dobi.state.nj.us; or ii. By directing a written request, along with a blank 3.5 inch, 1.44 MB MS-DOS format-ted disk, to the above address. The Department shall return the disk and a blank spread-sheet for completion by the insurer.
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.
a. A person is guilty of the crime of insurance fraud if that person knowingly makes, or causes to be made, a false, fictitious, fraudulent, or misleading statement of material fact in, or omits a material fact from, or causes a material fact to be omitted from, any record, bill, claim or other document, in writing, electronically, orally or in any other form, that a person attempts to submit, submits, causes to be submitted, or attempts to cause to be submitted as part of, in support of or opposition to or in connection with: (1) a claim for payment, reimbursement or other benefit pursuant to an insurance policy, or from an insurance company or the “Unsatisfied Claim and Judgment Fund Law,” P.L.1952, c. 174 (C.39:6-61 et seq.); (2) an application to obtain or renew an insurance policy; (3) any payment made or to be made in accordance with the terms of an insurance policy or premium finance transaction; or (4) an affidavit, certification, record or other document used in any insurance or premium finance transaction. b. A person who operates a motor vehicle on the public highways of this State, which motor vehicle is insured by a policy issued under the laws of another state, is guilty of the crime of insurance fraud if that person maintains a principal residence in this State or has his motor vehicle principally garaged in this State and he has knowingly prepared or made any written, electronic or oral statement, presented to any insurance company or producer licensed to transact the business of insurance under the laws of that other state, and which resulted in obtaining a motor vehicle insurance policy for his motor vehicle in that other state, that the person to be insured: (1) maintains a principal residence in the other state when, in fact, that person’s principal residence is in this State; or (2) has his motor vehicle principally garaged in the other state, when, in fact, that person has his motor vehicle principally garaged in this State. This subsection shall not apply to a person who insures a vehicle in another state, as permitted by and in accordance with the laws of that state, based on a second residence, or attendance at an educational institution, in that other state, if in obtaining the policy the person truthfully discloses to the insurance company or producer the state of the person’s principal residence and the state where the vehicle is principally garaged. c. Insurance fraud constitutes a crime of the second degree if the person knowingly commits five or more acts of insurance fraud, including acts of health care claims fraud pursuant to section 2 of P.L.1997, c. 353 (C.2C:21-4.2) and if the aggregate value of property, services or other benefit wrongfully obtained or sought to be obtained is at least $1,000. Otherwise, insurance fraud in violation of subsection a. of this section is a crime of the third degree and insurance fraud in violation of subsection b. of this section is a crime of the fourth degree. Each act of insurance fraud shall constitute an additional, separate and distinct offense, except that five or more separate acts may be aggregated for the purpose of establishing liability pursuant to this subsection. Multiple acts of insurance fraud which are contained in a single record, bill, claim, application, payment, affidavit, certification or other document shall each constitute an additional, separate and distinct offense for purposes of this section. d. Proof that a person has signed or initialed an application, bill, claim, affidavit, certification, record or other document may give rise to an inference that the person has read and reviewed the application, bill, claim, affidavit, certification, record or other document. e. In order to promote the uniform enforcement of this act, the Attorney General shall develop insurance fraud prosecution guidelines and disseminate them to county prosecutors within 180 days of the effective date of this act. f. Nothing in this act shall preclude an indictment and conviction for any other offense defined by the laws of this State. g. Nothing in this act shall preclude an assignment judge from dismissing a prosecution of insurance fraud if the assignment judge determines, pursuant to N.J.S.2C:2-11, the conduct charged to be a de minimis infraction.***a. A person or a practitioner violates this act if he: (1) Presents or causes to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy or the “Unsatisfied Claim and Judgment Fund Law,” P.L.1952, c. 174 (C.39:6-61 et seq.), knowing that the statement contains any false or misleading information concerning any fact or thing material to the claim; or (2) Prepares or makes any written or oral statement that is intended to be presented to any insurance company, the Unsatisfied Claim and Judgment Fund or any claimant thereof in connection with, or in
a. (1) Any person who believes that a violation of this act has been or is being made shall notify the bureau and the Office of the Insurance Fraud Prosecutor1 immediately after discovery of the alleged violation of this act and shall send to the bureau and office, on a form and in a manner jointly prescribed by the commissioner and the Insurance Fraud Prosecutor, the information requested and such additional information relative to the alleged violation as the bureau or office may require. The bureau and the office shall jointly review the reports and select those alleged violations as may require further investigation by the office for possible criminal prosecution, and those that may warrant investigation and possible civil action or enforcement proceeding by the bureau in lieu of or in addition to criminal prosecution. The Insurance Fraud Prosecutor and the assistant commissioner shall meet monthly to ensure that reports are handled in an expedited fashion. (2) Whenever the Bureau of Fraud Deterrence or any employee of the bureau obtains information or evidence of a reasonable possibility of criminal wrongdoing not previously known or disclosed to the Office of the Insurance Fraud Prosecutor, the bureau shall immediately refer that information or evidence to that office. In determining whether a referral to the office is appropriate, the bureau shall utilize appropriate levels of internal review, which shall include but not be limited to approval at the assistant commissioner level. Upon referral, the bureau shall provide the office with all documents related to the referral consistent with section 39 of P.L.1998, c. 21 (C.17:33A-23). b. No person shall be subject to civil liability for libel, violation of privacy or otherwise by virtue of the filing of reports or furnishing of other information, in good faith and without malice, required by this section or required by the bureau or the Office of the Insurance Fraud Prosecutor as a result of the authority conferred upon it by law. c. The commissioner may, by regulation, require insurance companies licensed to do business in this State to keep such records and other information as he deems necessary for the effective enforcement of this act.
The Insurance Fraud Prosecutor shall consider the restitution of moneys to insurers and others who are defrauded as a major priority, in order that policyholders may benefit from the prosecution of those persons guilty of insurance fraud, and to that end, any assets of any person guilty of fraud shall be subject to seizure.
(1) Presents or causes to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy or the “Unsatisfied Claim and Judgment Fund Law,” P.L.1952, c. 174 (C.39:6-61 et seq.), knowing that the statement contains any false or misleading information concerning any fact or thing material to the claim; or (2) Prepares or makes any written or oral statement that is intended to be presented to any insurance company, the Unsatisfied Claim and Judgment Fund or any claimant thereof in connection with, or in support of or opposition to any claim for payment or other benefit pursuant to an insurance policy or the “Unsatisfied Claim and Judgment Fund Law,” P.L.1952, c. 174 (C.39:6-61 et seq.), knowing that the statement contains any false or misleading information concerning any fact or thing material to the claim; or (3) Conceals or knowingly fails to disclose the occurrence of an event which affects any person’s initial or continued right or entitlement to (a) any insurance benefit or payment or (b) the amount of any benefit or payment to which the person is entitled; (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. c. A person or practitioner violates this act if, due to the assistance, conspiracy or urging of any person or practitioner, he knowingly benefits, directly or indirectly, from the proceeds derived from a violation of this act. d. A person or practitioner who is the owner, administrator or employee of any hospital violates this act if he knowingly allows the use of the facilities of the hospital by any person in furtherance of a scheme or conspiracy to violate any of the provisions of this act.