Pennsylvania - InsuranceFraud.org

PA HB 78 adds new types of data to the list of “sensitive data” and provides for the Consumer Data Privacy Act; provides that a consumer shall have specified rights; specifies the duties of controllers, defined as certain entities that sell consumer personal information; provides that a controller shall establish and describe in a privacy notice a secure and reliable means for consumers to submit a request to exercise such rights, including allowing a consumer to opt out of the processing of their data; defines sensitive data; provides for private rights of action. Does contain an antifraud exemption.

Date introduced: 1/14/2025

Key Sponsor: Ed Neilson

Committee: Appropriations

PA HB 392 amends the act known as The Insurance Company Law, in casualty insurance; provides for billing. It establishes new notification requirements when an insurer reimburses a nonnetwork EMS agency and issues payment directly to the policyholder rather than the EMS provider. The amendment introduces a fraud warning by explicitly stating that misuse of EMS reimbursement funds by a policyholder—using the money for anything other than paying the EMS provider—may result in an insurance fraud claim.

Date introduced: 1/28/2025

Key Sponsor: Seth M. Grove

Committee: House Insurance Committee

Anti-arson applications – Section 117.4 All application and claim forms Section 68.402 Section 117.4 – anti-arson applications – Language is mandatory “I (We) certify that all information contained herein is true and correct to the best of my (our) knowledge and belief. I (We) acknowledge that this statement is signed under the pains and penalties of perjury and any material false statement contained herein is punishable pursuant to 18 PA.C.S. Sec. 4904(b). I (We) acknowledge that this application shall constitute a part of any policy issued whether attached or not and that any willful concealment or misrepresentation of a material fact or circumstance shall be deemed grounds to void any policy issued. I (We) acknowledge that I (we) must notify the insurer in writing of any change in the information contained in this application within 60 days.” 18 Pa. CSA 4117(k)(1) (k) Insurance forms and verification of services.– All applications for insurance and all claim forms shall contain or have attached thereto the following notice: “Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.”

Title 75 Section 1817 — Reporting Requirements (Motor Vehicle Insurance Fraud) “Every insurer licensed to do business in this Commonwealth, and its employees, agents, brokers, motor vehicle physical damage appraisers and public adjusters, or public adjuster solicitors, who has a reasonable basis to believe insurance fraud has occurred shall be required to report the incidence of suspected insurance fraud to Federal, state or local criminal law enforcement authorities. Licensed insurance agents and physical damage appraisers may elect to report suspected fraud through the affected insurer with which they have a contractual relationship. All reports of insurance fraud shall be made in writing. Where insurance fraud involves agents, brokers, motor vehicle physical damage appraisers, public adjusters or public adjuster solicitors, a copy of the report shall also be sent to the department.” Title 31 Sections 119.22-26 — Reporting Requirements (Workers Compensation Fraud Plans) 31 Sec. 119.22 – Institution and maintenance of anti-fraud plans (a) Section 1203 of the act (___ P.S. ___) requires insurers, as defined in section 1101 of the act (___P.S.___), to institute and maintain an insurance anti-fraud plan. This requirement applies to a workers’ compensation insurer with workers’ compensation premium volume as of August 31, 1993. Workers’ compensation insurers which become licensed or commence a writing premium volume, or both, after August 31, 1993, should institute and maintain an anti-fraud plan within 4 months of commencing to write business. Maintenance of the anti-fraud plan include its ongoing implementation and operation by insurers. Since a substantial number of workers’ compensation insurers also actively write motor vehicle insurance, the Department encourages insurers to merge their workers’ compensation anti-fraud initiatives into their established motor vehicle insurance anti-fraud plans established under 75 Pa.C.S. Chapter 18 (relating to motor vehicle insurance fraud). The content of each insurers’ workers’ compensation anti-fraud plan should reflect the following minimum requirements: (1) Policies and procedures established by the insurer to prevent workers’ compensation insurance fraud. The policies and procedures should cover all aspects of the insurer’s operation and recognize the wide variety of potential fraudulent activity. Procedures should address internal fraud, fraud involving the integrity and security of company data including electronic data processed information, fraud involving employers or company representatives, and fraud resulting from misrepresentation on applications and renewals for insurance coverage and claims fraud. Detailed information should be provided describing existing procedure manuals, internal policies, guidelines and employee training programs implemented by the insurer to prevent fraud. It is recommended that specific policies and procedures be either included in the anti-fraud plan or, if the policies and procedures are voluminous, appropriately summarized. (2) Policies and procedures established by the workers’ compensation insurer to detect and investigate possible insurance fraud in the claims process. Reference should be made to specific procedure manuals, internal policies, guidelines and training initiatives designed to detect fraud in the claims process. (3) Policies and procedures established by the insurer to report workers’ compensation insurance fraud to appropriate criminal law enforcement agencies, including procedures to cooperate with and monitor progress of the agencies in their fraud cases. (b) To facilitate the Department’s understanding of insurers’ administration of their anti-fraud procedures, insurers are encouraged to cover the following areas in their plans: (1) Organizational components involved in or affected by the policies and procedures, including key positions involved. (2) Roles and interrelationships of components as they relate to the policies and the procedures described. (3) Personnel resources involved and budget allocations to implement the anti-fraud policies and procedures. (4) Extra-company relationships with central claims data bases and criminal law enforcement authorities as they relate to the policies and procedures implemented for anti-fraud plans. 31 Sec. 119.23 – Anti-fraud plan certification Each insurer writing workers’ compensation insurance … shall certify … that it has instituted and maintains an anti-fraud plan. 31 Section 119.24 – Anti-fraud plan annual reports § 119.24. Anti-fraud plan annual reports. (a) Section 1204 of the act (77 P. S. § 1040.4) requires insurers to report annually to the Department a summary of actions taken under their anti-fraud plans to prevent and combat fraud. Annual reports under this section should cover anti-fraud activities for each calendar year. The first annual report should cover the period August 31, 1993, through December 31, 1994, and shall be filed with the Department by March 31, 1995. Thereafter, reports are to be filed by March 31 of each year and cover the previous calendar year’s anti-fraud activities. The annual report should provide detailed information on the following: (1) Specific actions taken by the insurer during the year to prevent and combat insurance fraud. The actions should be thoroughly described in the annual report and should contain statistical information relating to the number of cases of detected fraud, including the status of disposition of those cases, the number of personnel and other resources committed to detecting and combating fraud, the total dollar cost of fraud and the savings attributed to detected fraud or otherwise recovered by the insurer. (2) Measures implemented throughout the year to provide for the integrity and security of fraud related data and information collected and maintained. The measures apply to data collected and maintained in a manual or automated environment. (3) Originating sources of the information on the fraudulent activity—for example, an agent, adjuster, employe, policyholder or citizen. (b) The annual reports should be submitted to the Department in a standard report format, including a table of contents, summary, subdivisions of information in the report, including tables and graphs necessary to clearly illustrate the statistical information. Additionally, insurers should identify the person responsible for preparing and filing the annual report. The Department may require that the insurer clarify items addressed in the report or provide additional information relative to the annual report. (c) Workers’ compensation insurers which also write motor vehicle insurance may file a single annual report for both motor vehicle and workers’ compensation insurance anti-fraud activities. The combined report shall segregate the information reported for both motor vehicle and workers’ compensation lines of business. The reports should be sent to the attention of the Insurance Department, Dennis C. Shoop, Director, Bureau of Enforcement, 1321 Strawberry Square, Harrisburg, Pennsylvania, 17120. (Deadline for Submission is March 31) 31 Section 119.25 – Reporting of fraud to criminal law enforcement authorities Consistent with section 1109 of the act (77 P. S. § 1039.9), section 1205 of the act (77 P. S. § 1040.5) authorizes insurers to refer an incidence of fraud to criminal law enforcement agencies. Workers’ compensation insurers should refer cases directly to criminal law enforcement authorities and cooperate with and assist those authorities when requested.

All insurer shall annually provide to the department a summary report on actions taken under the plan to prevent and combat insurance fraud, including, but not limited to, measures taken to protect and ensure the integrity of electronic data-processing-generated data and manually compiled data, statistical data on the amount of resources committed to combating fraud, and the amount of fraud identified and recovered during the reporting period. [Deadlines for submission is April 1.]

Title 75 Sections 1811-1816 (Motor Vehicle Insurance Fraud) Section 1811 — Each insurer licensed to write motor vehicle insurance in this Commonwealth shall institute and maintain a motor vehicle insurance antifraud plan…. All insurers licensed … shall file within six months of licensure. All changes to the antifraud plan shall be filed with the department within 30 days after it has been modified. § 1812. Content of plans. The antifraud plans of each insurer shall establish specific procedures: (1) To prevent insurance fraud, including internal fraud involving employees or company representatives, fraud resulting from misrepresentation on applications for insurance coverage, and claims fraud. (2) To review claims in order to detect evidence of possible insurance fraud and to investigate claims where fraud is suspected. (3) To report fraud to appropriate law enforcement agencies and to cooperate with such agencies in their prosecution of fraud cases. (4) To undertake civil actions against persons who have engaged in fraudulent activities. (5) To report fraud-related data to a comprehensive database system. (6) To ensure that costs incurred as a result of insurance fraud are not included in any rate base affecting the premiums of motor vehicle insurance consumers. WORKERS COMPENSATION FRAUD PLANS Pennsylvania Administrative Code TITLE 31. INSURANCE PART VII. PROPERTY, FIRE AND CASUALTY INSURANCE CHAPTER 119. ANTI-FRAUD — STATEMENT OF POLICY ANTIFRAUD PLANS § 119.22. Institution and maintenance of anti-fraud plans (a) Section 1203 of the act (77 P. S. § 1040.3) requires insurers, as defined in section 1101of the act (77 P. S. § 1039.1), to institute and maintain an insurance anti-fraud plan. This requirement applies to a workers’ compensation insurer with workers’ compensation premium volume as of August 31, 1993. Workers’ compensation insurers which become licensed or commence a writing premium volume, or both, after August 31, 1993, should institute and maintain an anti-fraud plan within 4 months of commencing to write business. Maintenance of the anti-fraud plan includes its ongoing implementation and operation by insurers. Since a substantial number of workers’ compensation insurers also actively write motor vehicle insurance, the Department encourages insurers to merge their workers’ compensation anti- fraud initiatives into their established motor vehicle insurance anti-fraud plans established under 75 Pa.C.S. Chapter 18 (relating to motor vehicle insurance fraud). The content of each insurers’ workers’ compensation anti-fraud plan should reflect the following minimum requirements: (1) Policies and procedures established by the insurer to prevent workers’ compensation insurance fraud. The policies and procedures should cover all aspects of the insurer’s operation and recognize the wide variety of potential fraudulent activity. Procedures should address internal fraud, fraud involving the integrity and security of company data including electronic data processed information, fraud involving employees or company representatives, and fraud resulting from misrepresentation on applications and renewals for insurance coverage and claims fraud. Detailed information should be provided describing existing procedure manuals, internal policies, guidelines and employe training programs implemented by the insurer to prevent fraud. It is recommended that specific policies and procedures be either included in the anti-fraud plan or, if the policies and procedures are voluminous, appropriately summarized. (2) Policies and procedures established by the workers’ compensation insurer to detect and investigate possible insurance fraud in the claims process. Reference should be made to specific procedure manuals, internal policies, guidelines and training initiatives designed to detect fraud in the claims process. (3) Policies and procedures established by the insurer to report workers’ compensation insurance fraud to appropriate criminal law enforcement agencies, including procedures to cooperate with and monitor progress of the agencies in their fraud cases. (b) To facilitate the Department’s understanding of insurers’ administration of their anti-fraud procedures, insurers are encouraged to cover the following areas in their plans: (1) Organizational components involved in or affected by the policies and procedures, including key positions involved. (2) Roles and interrelationships of components as they relate to the policies and the procedures described. (3) Personnel resources involved and budget allocations to implement the anti-fraud policies and procedures. (4) Extra-company relationships with central claims data bases and criminal law enforcement authorities as they relate to the policies and procedures implemented for anti-fraud plans.

(a) Offense defined.–A person commits an offense if the person does any of the following: (3) Knowingly and with the intent to defraud any insurer or self-insured, assists, abets, solicits or conspires with another to prepare or make any statement that is intended to be presented to any insurer or self-insured in connection with, or in support of, a claim that contains any false, incomplete or misleading information concerning any fact or thing material to the claim, including information which documents or supports an amount claimed in excess of the actual loss sustained by the claimant.

(a) Offense defined.–A person commits an offense if the person does any of the following: (5) Knowingly benefits, directly or indirectly, from the proceeds derived from a violation of this section due to the assistance, conspiracy or urging of any person. (6) Is the owner, administrator or employee of any health care facility and knowingly allows the use of such facility by any person in furtherance of a scheme or conspiracy to violate any of the provisions of this section. (7) Borrows or uses another person’s financial responsibility or other insurance identification card or permits his financial responsibility or other insurance identification card to be used by another, knowingly and with intent to present a fraudulent claim to an insurer.

(a) Offense defined.–A person commits an offense if the person does any of the following: (2) Knowingly and with the intent to defraud any insurer or self-insured, presents or causes to be presented to any insurer or self-insured any statement forming a part of, or in support of, a claim that contains any false, incomplete or misleading information concerning any fact or thing material to the claim. (3) Knowingly and with the intent to defraud any insurer or self-insured, assists, abets, solicits or conspires with another to prepare or make any statement that is intended to be presented to any insurer or self-insured in connection with, or in support of, a claim that contains any false, incomplete or misleading information concerning any fact or thing material to the claim, including information which documents or supports an amount claimed in excess of the actual loss sustained by the claimant.

No statute found..

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