Transcript INSURANCE CLAIMS FRAUD

FRAUD AWARENESS
TRAINING
BY
THE SIU GROUP
Fraud Investigations & Security Consultants, LLC
5121 Bowden Rd., Suite 307, Jacksonville, FL 32216
(904) 828 - 0079
INSURANCE FRAUD
What is Insurance Fraud?
Any action taken by an individual with the intent to
fraudulently obtain payment from an insurer is considered
insurance fraud.
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Insurance Fraud is not a victimless crime. It is estimated that
insurance fraud costs the US $80 billion dollars or more a year.
Those costs get passed down to consumers. The Coalition
Against Insurance Fraud (CAIF) estimates that cost to be
approximately $950 per family. (AS NOTED BY DFS/DIF)
CLAIMS ADJUSTER DUTIES AND RESPONSIBILITIES
REGARDING FRAUD
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Most claims are legitimate, and should be handled and processed as such. Acting or presenting yourself in any other way to a claimant can imply
that “you” and the “insurance Company” are acting in “Bad Faith”, and as such exposed to civil and regulatory liability. Many claims though, are
inflated or fraudulent. Therefore, it is appropriate for the adjuster to review all claims for possible fraud.
Why ? First of all Fraud is a crime. Second, by reducing paying fraudulent claims we help keep “Premiums” down for all the other policy holders.
Third, we are tasked and mandated to “Fight Fraud” by State Laws, Rules, and guidelines. Then finally, but not least, It is the Right thing to do.
The claims adjuster should be familiar with known “possible Fraud” Indicators. These indicators, or fraud possibility factors, should help
isolate those claims which merit closer scrutiny. No one indicator by itself is necessarily suspicious or indicative of fraud. Even the presence of
several indicators, while suggestive of possible fraud, does not mean that a fraud has been committed. Indicators of possible fraud are not evidence
that fraud has occurred.
The indicators should prompt the claims adjuster to look closely at the file, considering possible fraud. Also, they should consult their SIU, or
contracted SIU, to at least look at the file as well, and be given a referral for their SIU involvement in the claim.
All suspicious claims, though they may have to be paid for lack of conclusive evidence of fraud, should be referred to NICB. There is no limit to the
number of cases you may refer. No claim is too small for referral.
*** When we all take these steps in handling claims we help provide a better product to the public.
PARTNERS IN FIGHTING INSURANCE FRAUD
* FLORIDA DEPARTMENT OF FINANCIAL SERVICES –
DIVISION OF INSURANCE FRAUD.
* COALITION AGAINST INSURANCE FRAUD.
* NATIONAL INSURANCE CRIME BUREAU.
* INSURANCE COMPANIES.
* SIU – SPECIAL INVESTIGATION UNITS.
* CLAIMS ADJUSTERS.
* PRIVATE INVESTIGATION AGENCIES CONTRACTED
BY INSURANCE COMPANIES.
* MANY PRIVATE SECTOR CONTRACT SERVICES
JEFF ATWATER, CHIEF FINANCIAL OFFICER
FLORIDA DEPARTMENT OF FINANCIAL SERVICES
DIVISION OF INSURANCE FRAUD
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Established by the legislature in 1976, the Division of Insurance Fraud is the law enforcement arm of the
Department of Financial Services and is responsible for investigating insurance fraud; crimes associated
with personal injury protection (PIP) insurance fraud, insurance premium fraud, workers' compensation
claim fraud, workers' compensation premium avoidance and diversions, insurer insolvency fraud,
unauthorized entity fraud and insurance agent crimes.
DIVISION OF INSURANCE FRAUD
ANNUAL REPORT 2010-11  2010/11 DIF REFERRALS
TOTAL 13,452
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PIP Fraud 50% at 6,699
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FOLLOWED BY:
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WORKERS’ COMP 11% AT 1,495
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VEHICLE FRAUD 7% AT 1,008
Record Setting First Quarter for Florida Division of
Insurance Fraud
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Florida Chief Financial Officer Jeff Atwater reported a record setting first quarter
for the Florida Department of Financial Services Division of Insurance Fraud
(DIF). With over 100 arrests each month so far in 2012, and the most arrests in
over 2 decades for a single month in March, DIF’s impact is being felt.
According to the press release from the Chief Financial Officer’s office:
Under CFO Atwater’s leadership, the division has made nearly 1,400 arrests
and recovered more than $150 million in court-ordered restitution.
In addition to these arrests, the division’s investigations have led to the
shutting down of more than 50 medical clinics due to intensive Personal
Injury Protection (PIP) fraud investigations. PIP fraud constitutes the highest
number of referrals to the division, and is a high priority for CFO Atwater.
According to the report, DIF investigations have resulted in over 1,400 arrests
and recovery of over $150 million in court ordered restitution.
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a 100-year heritage, the National Insurance Crime Bureau (NICB) is the nation's premier not-forprofit organization dedicated exclusively to fighting insurance fraud and crime, and is the only
organization in the United States that convenes the collective resources needed to prevent, detect and deter
these crimes.
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The NICB was formed in 1992 from a merger between the National Automobile Theft Bureau (NATB) and
the Insurance Crime Prevention Institute (ICPI), both of which were not-for-profit organizations. The NATB –
which managed vehicle theft investigations and developed vehicle theft databases for use by the insurance
industry – dates to the early 20th century, while the ICPI investigated insurance fraud for approximately 20
years before joining with the NATB to form the present National Insurance Crime Bureau.
Today, our membership includes more than 1,100 property and casualty insurance companies, self-insured
organizations, rental car companies, parking services providers, and transportation-related firms.
Beyond our membership, our 300+ employees work with law enforcement agencies, technology experts,
government officials, prosecutors, international crime-fighting organizations and the public to lead a united
effort to prevent and combat insurance fraud and crime.
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NICB Reports a 19 Percent Rise in Questionable Claims Since 2009
Referrals Break 100,000 Ceiling for First Time
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DES PLAINES, Ill., Feb. 28, 2012 — The National Insurance Crime Bureau (NICB)
today released its 2011 questionable claims (QC) referral reason analysis. The report
examines six referral reason categories of claims: property, casualty, commercial,
workers’ compensation, vehicle and miscellaneous referred in 2011, with those
referred in 2009 and 2010.
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In 2009, there were 84,407 QCs referred to NICB from its member insurance
companies. In 2010, that number increased to 91,797. In 2011, that number
increased again to 100,450—a record level. This represents a 9.4 percent increase
from 2010 to 2011. Over the two year timeframe from 2009 to 2011 there was a 19
percent increase. Questionable claims are those claims that NICB member insurance
companies refer to NICB for closer review and investigation based on one or more
indicators of possible fraud. A single claim may contain up to seven referral reasons.
The power of unity
Flash back to 1993. Spiraling insurance scams were driving everyone's premiums higher and higher. The nation was
struggling with a mounting crime wave, looking for answers.
Leaders of the anti-fraud fight realized America needed a catalyst to unite and ignite the power of many diverse groups
against rampant fraud. Only a long term commitment would work against such a deeply entrenched problem.
The vision of these charter members became the Coalition Against Insurance Fraud — the nation's only anti-fraud
watchdog that speaks for consumers, insurance companies, legislators, regulators and others.
Control everyone's costs
The coalition has become one of America's most trusted and credible anti-fraud forces, thanks to our remarkable diversity.
Together, our members are working to control everyone's insurance costs, protect the public safety, and bring this crime
wave to its knees.
Since its founding in 1993, the coalition has worked effectively to....
• enact tough new anti-fraud laws and regulations
• educate the public how to fight back, and
• serve as a national clearinghouse of fraud information.
STATEWIDE PIP FRAUD ARRESTS APRIL 2012
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PARTIAL LIST
Geraldo Caroni Gomez, 40 – staged acct 04/03/09 (driver) $28,375 - E & B Rehabilitation Center / Franco’s Medical
Center (Progressive / State Farm) M
Enrique Moreno, 64 – PIP patient - $787 – Vital Care Medical Center (Allstate) W
Magdalas Mortimer, 38 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State
Farm) O
Marilia Etienne-Lubin, 47 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State
Farm) O
Isemona Pierre, 25 – staged acct 01/07/09 (recruiter) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O
Vilnor Perou, 41 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O
LaShanda Kaye Pleas, 29 – staged acct 05/01/10 (driver) staged acct 05/27/10 (driver) $30,945 - x (Omni) O
Lucson Dupervil, 27 – fake ins card (Geico) W
Edwin Ramirez Montalvo, 39 – fake ins card (National) W
Shenika Keaton, 18 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida
Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O
Talitha Atkinson, 21 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida
Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O
Andre Washington, 29 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida
Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O
STATEWIDE DIF PIP CONTACTS
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PANHANDLE REGION
Counties: Bay, Calhoun, Escambia, Franklin, Gadsden, Gulf, Holmes, Jackson, Jefferson, Lafayette, Leon, Liberty,
Madison, Okaloosa, Santa Rosa, Taylor, Wakulla, Walton, Washington
Tallahassee Field Office - 850.413.3115, Capt. Robert Brongel Pensacola Field Office – 850.453.7802, Lt. Joseph
Holokan
NORTH REGION
Counties: Alachua, Baker, Bradford, Citrus, Clay, Columbia, Dixie, Duval, Flagler, Gilchrist, Hamilton, Levy, Marion,
Nassau, Putnam, St. Johns, Sumter, Suwannee, Union
Jacksonville Field Office - 904.798.5802, Capt. Brian McCoy, Lt. Kevin Jones
WEST CENTRAL REGION
Counties: Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Lee, Manatee,
Pasco, Pinellas, Polk, Sarasota
Tampa Field Office - 813.972.8602; Capt. Michael Byrne, Lt. Carlos Rosario, Lt. Darrell Wilson
Fort Myers Field Office - 239.278.7527, Lt. Mark Fritz
EAST CENTRAL REGION
Counties: Brevard, Indian River, Lake, Martin, Okeechobee, Orange, Osceola, Palm Beach,
Seminole, St. Lucie, Volusia; West Palm Beach Field Office - 561.837.5601; Maj. Simon Blank, Capt.
Glen Hughes, Lt. Evangelina Brooks, Orlando Field Office – 407.835.4402, Lt. Jewel Cameron, Lt. Paul Meyers
LIST CONTINUED ON NEXT SLIDE -
STATEWIDE DIF PIP CONTACTS
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CONTINUED –
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SOUTH REGION
Counties: Broward, Dade, Monroe
Miami Field Office - 305.536.0302
Capt. Steven Smith
Lt. Violeta Serrano
Lt. John Dygon
Lt. Stanley Jean-Felix
Plantation Field Office - 954.321.2902
Lt. Bill Lee
South Florida Major Medical Fraud Task Force
Supervisory Special Agent Fred Burkhardt 954.329.7427
Central Florida Major Medical Fraud Task Force
Supervisory Special Agent Dennis Russo 863.967.6904
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BREAKING NEWS – PIP REFORM
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Breaking News - Governor Scott Signs PIP Bill
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On May 4 in Jacksonville, Governor Rick Scott signed legislation to reform auto accident fraud in
Florida, this year’s number one consumer protection issue. This meaningful legislation will lower
the cost of auto insurance premiums for Florida drivers by limiting fraud in Personal Injury
Protection (PIP) insurance. Accident fraud would have cost average Floridians over $1 billion
this year if PIP reform was not passed.
“Growing up in a family without a lot of money, I truly understand the value of the hard-earned
dollar for Florida families,” Governor Scott said. “By helping reduce fraudulent auto accident claims,
this legislation will benefit the pocketbooks of every Florida family who drives an automobile. I am
glad to do my part in keeping the cost of living low in Florida, and I will continue to work to find
ways to do so.”
Florida Chief Financial Officer Jeff Atwater released the following statement regarding Gov.
Scott’s signing of the bill:
“With the signing of this bill today, Florida will release the chokehold that fraud has on
Florida’s insurance consumers. I commend Gov. Scott for signing this important piece of
legislation and for his tireless work to ensure that we pass significant reforms to protect our fellow
Floridians.
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DIF – BWCF, BUREAU OF WORKERS COMP FRAUD
DFS – DIF FRAUD ARRESTS 2011
WORKERS COMPENSATION CLAIMS
CHANGES COMING IN WORKERS COMP LAWS TO
FIGHT FRAUD
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Statement from Chief Financial Officer Jeff Atwater on the Signing of HB 1277 Fighting Workers’
Compensation Fraud
4/9/2012 Contact: Alexis Lambert 850-413-2842
TALLAHASSEE—Florida Chief Financial Officer Jeff Atwater today released the following statement
regarding Governor Rick Scott’s signing of HB 1277 that aims to curb workers’ compensation fraud.
HB 1277, sponsored by Rep. Daniel Davis (R-Jacksonville) and SB 1586 sponsored by Sen. John
Thrasher (R-Jacksonville), was based on recommendations from a work group convened in August 2011
by CFO Atwater to review the practices of certain bad actors in the check cashing services industry that
aid in workers’ compensation premium fraud. The work group released its report in November.
“I commend Gov. Scott for signing this important legislation to fight workers’ compensation fraud.
As a result of bringing all stakeholders to the table last fall, we were able to recommend policy solutions to
the Legislature that protect the responsible players in the marketplace while ensuring those who are
diverting more than a billion dollars from Florida’s economy are caught and held accountable.
RED FLAGS FOR POSSIBLE WORKERS COMP FRAUD AND ABUSE
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The Injured Employee 
Has injuries that are inconsistent with facts of the accident.
Provides multiple versions of how the accident occurred.
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Refuses medical tests or examinations to confirm an injury.
Stays out of work longer than the doctor prescribed.
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Protests excessively about a modified position or returning to work
and never seems to improve.
Has a suspicious prior history of reporting subjective injuries.
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Has a questionable identity, residence or contact information
Was experiencing financial difficulties prior to submission of a
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claim and inquires about a quick claim settlement.
Is retiring, on probation, involved in a labor dispute, disgruntled,
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a poor job performer or subject to disciplinary action.
Is a new employee, nomadic, a seasonal worker or on short-term
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employment.
Is never at home, does not answer telephone or avoids the use of
U.S. Mail.
The Accident or Illness –
Lacks witnesses.
Occurs late on a Friday afternoon (especially if not
reported until Monday) or early on a Monday
morning.
Is not associated with employee's job duties.
Occurred in an area not frequented by employee.
Is not reported to the employer in a timely way.
Leads to rumors at work that the accident was
staged or illegitimate.
Indicators of Fraud Concerning the Insured
Indicators
of Vehicle Theft Fraud
* Has lived at current address less than six months
* Has been with current employer less than six months
* Address is a post office box or mail drop
* Does not have a telephone
* Listed number is a mobile/cellular phone
* Is difficult to contact
* Frequently changes address and/or phone number
* Place of contact is a hotel, tavern, or other than employment or residence
* Handles all business in person, thus avoiding the use of mail
* Is unemployed
* Claims to be self-employed but is vague about the business details
* Has recent or current marital and/or financial problems
* Has a temporary, recently issued, or out-of-state driver’s license
* Driver’s license has recently been suspended
More indicators listed on the next slide -
Indicators of Fraud Concerning the Insured (Continued)
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Recently called to confirm and/or increase coverage
Has an accumulation of parking tickets on vehicle
Is unusually aggressive and pressures for quick settlement
Offers inducement for quick settlement
Is very knowledgeable of claims process and insurance terminology
Income is not compatible with value of insured vehicle
Claims expensive contents in vehicle at time of left
Is employed with another insurance company
Wants a friend or relative to pick up settlement check
Is behind in loan payments on vehicle and/or other financial obligations
Avoids meetings with investigators and/or claim adjusters
Cancels scheduled appointments with claim adjusters for statements and/or
examination under oath
Has a previous history of vehicle theft claims
Indicators of Fraud Related to the Vehicle
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Was purchased for cash with no bill of sale or proof of ownership
Is a new or late model with no lien holder
Was very recently purchased
Was not seen for an extended period of time prior to reported theft
Was purchased out of state
Has a history of mechanical problems
Is a "gas guzzler"
Is customized, classic, and/or antique
Displayed "for sale" signs prior to theft
Was recovered clinically/carefully stripped
Is parked on street although garage is available
Was recovered stripped, but insured wants to retain salvage, and repair appears to be impractical
Is recovered by the insured or a friend
Purchase price was exceptionally high or low
Was recovered with old or recent damage and coverage was high deductible or no collision
coverage
More indicators on the next slide -
Indicators of Fraud related to the vehicle – CONT’D
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Coverage is only on a binder
Has an incorrect VIN (e.g. not originally manufactured, inconsistent with model)
VIN is different than VIN appearing on the title
VIN provided to police is incorrect
Safety certification label is altered or missing
Safety certification label displays different VIN than is displayed on vehicle
Has theft and/or salvage history
Is recovered with no ignition or with steering lock damage
Is recovered with seized engine or blown transmission
Was previously involved in a major collision
Is late model with extremely high mileage (exceptions: taxi, police, utility vehicles)
Is older model with exceptionally low mileage (i.e., odometer rollover/rollback)
Is older or inexpensive model and insured indicates it was equipped with expensive accessories
which cannot be substantiated with receipts
Is recovered stripped, burned, or has severe collision damage within a short duration of time after
loss allegedly occurred
Leased vehicle with excessive mileage for which the insured would have been liable under the
mileage limitation agreement
Indicators of Fraud Related to Coverage
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Loss occurs within one month of issue or expiration of the
policy
Loss occurs after cancellation notice was sent to insured
Insurance premium was paid in cash
Coverage obtained via walk-in business to agent
Coverage obtained from an agent not located in close
proximity to insured’s residence or work place
Coverage is for minimum liability with full comprehensive
coverage on late model and/or expensive vehicle
Coverage was recently increased
Indicators of Fraud Related to Reporting
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Police report has not been made by insured or has been delayed
No report or claim is made to insurance carrier within one week after
theft
Neighbors, friends, and family are not aware of loss
License plate does not match vehicle and/or is not registered to insured
Title is junk, salvage, out-of-state, photocopied, or duplicated
Title history shows non-existent addresses
Repair bills are consecutively numbered or dates show work
accomplished on weekends or holidays
An individual, rather than a bank or financial institution, is named as
the lien holder
Other General Indicators of Vehicle Theft Fraud
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Vehicle is towed to isolated yard at owner’s request
Salvage yard or repair garage takes unusual interest in
claim
Information concerning prior owner is unavailable
Prior owner cannot be located
Vehicle is recovered totally burned after theft
Fire damage is inconsistent with loss description
VINs were removed prior to fire
Indicators of Casualty Fraud
CLAIMS ADJUSTER SHOULD CONSIDER THE FOLLOWING
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Most claims are legitimate, but many are inflated or fraudulent. Therefore, it is
appropriate for the adjuster to review all claims for possible fraud. Determining
the "fraud probability" of any claim is facilitated when the adjuster is familiar with
various fraud indicators.
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These indicators, or fraud possibility factors, should help isolate those claims
which merit closer scrutiny. No one indicator by itself is necessarily suspicious.
Even the presence of several indicators, while suggestive of possible fraud,
does not mean that a fraud has been committed. Indicators of possible fraud are
not evidence that fraud has occurred.
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All suspicious claims, though they may have to be paid for lack of conclusive
evidence of fraud, should be referred to NICB There is no limit to the number of
cases you may refer. No claim is too small for referral.
General Indicators of Insurance Fraud
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Claimant or insured is excessively eager to accept blame for an
accident, or is overly pushy or demanding of a quick, reduced
settlement.
Claimant or insured is unusually familiar with insurance terms and
procedure, medical, or vehicle repair terminology.
One or more claimants or insured list a post office box or hotel as
address.
All transactions were conducted in person; claimant avoids using
the telephone or the mail.
The kind of accident or type of vehicles involved arc not typical of those
seen on a regular basis.
Claimant threatens to go to an attorney or physician if the claim is not
quickly settled.
Claimant is a transient or out-of-towner on vacation.
Indicators of Automobile Accident Schemes
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Either no police report or an over-the-counter report for an accident resulting in
multiple injuries and/or extensive physical damage.
Accident occurred shortly after one or more of the vehicles were purchased
or registered, or after the addition of comprehensive and collision coverage to
the policy.
Insured has a history of accidents within a short period of time on one policy.
Index returns indicate an active claim history.
Insured has no record of prior insurance coverage although damaged vehicle
was purchased much earlier than inception of policy and date of loss.
Expensive, late model automobile was recently purchased with cash (no lien
holder).
Attorney's lien or representation letter is dated the day of the accident or
soon after.
Indicators of Auto Physical Damage Fraud
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Serious accident with expensive physical damage claim but only minor,
subjectively diagnosed injuries, with little or no medical treatment.
Despite expensive damage claims, the claimant vehicle remains
drivable. Often, there are no towing charges for removing vehicle from the
scene of the accident.
Claimant vehicle was struck by a rental vehicle soon after the rental had
occurred.
Claimant vehicle is not to be repaired locally, but driven or shipped out of
state for repair.
All vehicles in a reported accident are taken to the same body shop.
Claimant vehicles are not readily available for independent appraisal.
Reported accident occurred on private property near residence of those
involved.
Indicators of Medical Fraud/Claim Inflation
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Three or more occupants in the claimant or "stuck vehicle"; all of them report similar injuries.
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All injuries are subjectively diagnosed, such as headaches, muscle spasms, traumas, and others.
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Medical claims are extensive, but collision is minor with little physical damage to vehicle.
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All of the claimants submit medical bills from the same doctor or medical facility.
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Medical bills submitted are photocopies of originals.
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Summary medical bills are submitted without dates and descriptions of office visits and treatments,
or treatment extends for a lengthy period without any interim bills.
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Vehicle driven by claimant is an old "clunker" with minimal coverage.
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Insured, even though legally liable for accident, is adamant that claimants were responsible for
accident, indicating that the insured may have been "targeted" by the claimants.
Indicators of Medical Fraud/Claim Inflation
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Claimants retain legal representation immediately after the
accident is reported.
Minor accident produces major medical costs, lost wages and
unusually expensive demands for pain and suffering.
Past experience demonstrates that the physician's bill and report,
regardless of the varying accident circumstances, is always the
same.
Treatment prescribed for the various injuries resulting from differing
accidents is always the same in terms of duration and type of
therapy.
Medical bills indicate routine treatment being provided on Sundays
and holidays.
Indicators of Lost Earnings Fraud
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Employment information is for an unknown business, often with a post
office box for address, or a street address in a residential area.
Business telephone number is connected to an answering machine or
answering service.
Lost earnings statement is handwritten or typed on blank paper, not
business letterhead.
Claimant started employment shortly before accident occurred, or is
self-employed.
One or more elements of claim is questionable: e.g. length of
absence, rate of pay, income incompatible with claimant's residence.
Efforts to verify lost wage statement with employer raise doubts about
employer's legitimacy or about the actual employment of claimant.
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FLORIDA STATUTES, CHAPTER 626 INSURANCE
FRAUDULENT PROOF OF LOSS - CRIMINAL VIOLATION
The 2011 Florida Statutes Title XXXVII INSURANCE Chapter 626
INSURANCE FIELD REPRESENTATIVES AND OPERATIONS
626.8797 Proof of loss; fraud statement.—All proof of loss
statements must prominently display the following statement:
“Pursuant to s. 817.234, Florida Statutes, any person who, with the intent
to injure, defraud, or deceive any insurer or insured, prepares, presents, or
causes to be presented a proof of loss or estimate of cost or repair of
damaged property in support of a claim under an insurance policy knowing
that the proof of loss or estimate of claim or repairs contains any false,
incomplete, or misleading information concerning any fact or thing material
to the claim commits a felony of the third degree, punishable as provided in
s. 775.082, s. 775.083, or s.775.084, Florida Statutes.”
SIU DESIGNATE AND DIF
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Division of Insurance Fraud
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COMMUNICATION: Section 626.989(4)(d), F.S. provides that persons identified as designated employees whose responsibilities
include the investigation and disposition of claims relating to suspected fraudulent insurance acts may share information
relating to persons suspected of committing fraudulent insurance acts with other designated employees employed by the same or
other insurers whose responsibilities include the investigation and disposition of claims relating to fraudulent insurance acts, provided
the department has been given written notice of the names and job titles of such designated employees prior to such designated
employees sharing information. Unless the designated employees of the insurer act in bad faith or in reckless disregard for
the rights of any insured, neither the insurer nor its designated employees are civilly liable for libel, slander, or any other
relevant tort, and a civil action does not arise against the insurer or its designated employees.
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ADD or DELETE A DESIGNATED EMPLOYEE: Click on [email protected] to provide the written notice of the
NAME and JOB TITLE of the “designated employee” whose responsibilities include the investigation and disposition of claims
relating to suspected fraudulent acts. The email request must also provide the insurer identifiers making the request
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Contact SIU Administrator:
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Denise Prather
Senior Management Analyst I
200 East Gaines Street
Tallahassee, Florida 32399-0324
[email protected]
INSURANCE ANTI-FRAUD PLAN REPORTING
TO DFS - DIF
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Rule Chapter 69D-2, FAC was adopted September 15, 2006. Effective 20 days from this
date insurers and Health Maintenance Organizations (HMO) were required to file updated
SIU Descriptions or Anti-fraud plans pursuant to section 626.9891, Florida Statutes. The
type of filing will be differentiated by the insurer’s volume of Florida annual direct written
premium for calendar year 2006. Those insurers that write $10 million or more in annual
direct written premium are subject to Section 626.9891(1), F.S. and 69D-2.003, FAC and
those that write less than $10 million in annual direct written premium are subject to Section
626.9891(2), F.S. and 69D-2.004, FAC.
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Rule Chapter 69D-2, FAC requires that insurers and HMOs file the updated SIU
descriptions and anti-fraud plans on the division’s on-line, electronic database known
as IFPR (INSURANCE FRAUD PLAN REPORTING). Further, the rule stipulates that
insurers and HMOs must file the updated SIU descriptions AND/OR anti-fraud plans on
FORMS specified by the division. There are only two types of forms available. The
available forms are indicated below. An insurer or HMO will only make one filing, either the
SIU description or anti-fraud plan depending on their premium volume.
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Continued next slide -
RULE 69D-2
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69D-2.001 Purpose and Scope.
The purpose of this rule chapter is to implement the provisions of Section
626.9891, F.S., establishing guidelines and reporting
requirements for insurer anti-fraud investigative units and anti-fraud plans.
69D-2.002 Definitions.
For the purposes of this rule:
(1) “Division” refers to the Department of Financial Services, Division of
Insurance Fraud.
(2) “NAIC” refers to the National Association of Insurance Commissioners.
(3) “Office” refers to the Office of Insurance Regulation.
(4) “SIU” refers to an insurer’s internal or contracted anti-fraud
investigative unit.
69D-2.003 Insurer SIUs
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(1) An insurer subject to Section 626.9891(1), F.S., shall file with the Division a detailed description of their SIU, and
shall submit the following information in the SIU description to satisfy this filing requirement:
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(a) The names of all personnel assigned to the SIU, and a description of each person’s work responsibilities relating to
the SIU’s anti-fraud efforts;
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(b) An acknowledgment that the SIU has established criteria that will be used to detect suspicious or fraudulent
activity during investigations relating to the different types of insurance offered by that insurer;
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(c) An acknowledgment that the SIU has established criteria that will be used for the investigation of acts of
suspected insurance fraud relating to the different types of insurance offered by that insurer.
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(d) An acknowledgment that the insurer or SIU shall report all suspected fraudulent insurance acts directly to the
Division electronically via Form DFS-L1-1691 (Eff. 10-5-06) “Suspected Fraud Referral Form,” or an electronic reporting
interface that is linked to such form, as provided on the Division’s website at www.myfloridacfo.com
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(e) An acknowledgment that all such reports of suspected insurance fraud shall contain information that clearly defines
and supports the allegation of suspicious activity.
. Form DFS-L1-1691 (Eff. 10-5-06) Suspected Fraud Referral Form i
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69D-2.003 Insurer SIUs
Continued from previous slide
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(f) An acknowledgment that the insurer or SIU shall record the date that suspected fraudulent activity is detected, and shall record the
date that reports of such suspected insurance fraud are sent directly to the Division;
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(g) An acknowledgment that the insurer or SIU shall provide training relating to the detection and investigation of fraudulent
insurance acts for all personnel involved in anti-fraud related efforts.
(h) An acknowledgment that the insurer or SIU shall provide on-going training during the reporting period;
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(i) The contact information including names, email addresses, and telephone numbers, for personnel designated by the insurer
or SIU to be responsible for achieving and maintaining compliance with Section 626.9891(1), F.S., and this rule chapter;
(j) The insurer’s NAIC individual and group code numbers;
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(2) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, shall submit this SIU description electronically via the
Division’s website at www.myfloridacfo.com. The SIU description shall be submitted electronically on Form DFS-L1-1689 (Eff. 10-5-06)
“SIU Description Form” as provided on the Division’s website at www.myfloridacfo.com
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(3) Nothing in this rule shall require that an SIU utilize all established criteria in every circumstance.. Form DFS-L11689 (Eff. 10-5-06) SIU Description Form is hereby adopted and incorporated by reference. The insurer’s filing of the information required
in subsection (1) above shall constitute an adequately detailed description of its SIU as required by Section 626.9891(1),F.S.
(4) The filing of the information required herein is not intended to constitute a waiver of an insurer’s privilege, trade secret,
confidentiality or any proprietary interest in its SIU, its SIU description, or its SIU policies and procedure
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INSURANCE ANTI-FRAUD PLAN REPORTING
TO DFS - DIF
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At the time the rule was promulgated, there was no requirement* to submit annual or subsequent SIU
descriptions or anti-fraud plan filings UNLESS THE CARRIER MAKES CHANGES in its anti fraud personnel
(#2) or contact information (#6). If a carrier changes its name or is sold to a different insurance group, the carrier
should submit an updated SIU description and or anti-fraud plan filing. The carrier should contact Denise E.
Prather, DIF, FL DFS at [email protected] to advise the proposed changes. *This is always
subject to change so please periodically check to determine if DIF has modified the rule or the statute.
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The following are required forms for submitting the SIU description and anti-fraud plan filings:
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Form DFS-L1-1689/SIU Description – Word/PDF – if more than $10 million in Florida annual direct written
premium.
Form DFS-L1-1689 (Word)
Form DFS-L1-1689 (PDF)
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Form DFS-L1-1690/Anti-fraud plans – Word/PDF – if less than $10 million in Florida direct written premium
Form DFS-L1-1690 (Word)
Form DFS-L1-1690 (PDF)
INSURANCE ANTI-FRAUD PLAN REPORTING
TO DFS - DIF
Once the form is selected, the user will click on the form and “save” the form file to your computer files. You can
save it as the form number, but it may be better to rename it after the form has been completed. The insurer
or HMO should complete each of the component requirements (Questions) on the form. You can
click “Instructions for Filing SIU Descriptions and Anti-fraud plans to IFPR” for detailed instructions to make
the filing. For background, our division is seeking declaratory statements acknowledging the component
requirements of the rule in the form filing. The rule filing allows an insurer to acknowledge specific
component requirements without having to submit the detail of these requirements to the
division. However, FL OIR Market Investigations may conduct audits of insurers. The insurer must be
prepared to show that it has documented measures and plans in place that demonstrate the component
requirements are viable within the SIU or insurer organization.
Continued from last slide
We are only looking for acknowledgements of the component requirements as shown in the rule as
Florida has a broad public records law and the anti fraud plan and SIU descriptions are subject to
public record. However, it is important that your company develop viable investigative and detection
techniques for their anti fraud personnel and claim staff. The OIR will look at training documentation
records, referrals made to the division, claim files to be certain that adjusters have knowledge of “red flags”
to detect insurance fraud, and tracking the time frame from when the suspected fraud is detected to when
the suspected fraud is referred to the Division.
WORKERS COMP ANTI-FRAUD PLANS
FILING WITH DFS - DIF
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The Florida 2003 Legislature required all Workers Compensation carriers to submit a series of statistical and
narrative data on its experience and maintenance of its anti-fraud efforts. We created the Workers’ Compensation
Anti-Fraud (WCAF) Report filing system for WC carriers to report this data. The first thing you must do is activate a new
account. This must be done every year. We ask for basic identifying information, including an email address and a
password. You will receive an email that includes the account code and a link to the WCAF database. You will click on
the link to begin the WCAF report filing. It is a simple report to complete. We provide Frequently Asked Questions which
explains much of the process as well as provides definitions of the data required. Thank you for using this electronic
report filing system.
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Workers’ Compensation Annual Anti-Fraud Report Filing:
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Effective August 1, of every year, each insurer writing workers' compensation insurance in Florida shall report to the
Division of Insurance Fraud, Bureau of Workers’ Compensation Fraud its experience in implementing and maintaining an
anti-fraud special investigative unit (SIU) or an anti-fraud plan. DFS Informational Memorandum 04-002 describes the
statistical data required pursuant to 626.9891 (6), Florida Statutes.
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The time period for 2010 reporting is July 1, 2010 through June 30, 2011 (but carriers may use a calendar year period 1-12010 through 12-31-2010 or any other annual period, but please advise what period is reported in the “Description of the
organization of the SIU or anti-fraud unit” section.
Continued on next slide -
WORKERS COMP ANTI-FRAUD PLAN FILING
WITH DFS - DIF
Continued from previous slide
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The report filing requires:
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The dollar amount of recoveries and losses delineated by type of WC fraud.
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The number of referrals submitted to the Bureau of Workers’ Compensation Fraud delineated by type of WC fraud.
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A description of the organization of the SIU or anti-fraud unit including position titles and descriptions of staffing.
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The “rationale” for the level of staffing and resources being provided based on such criteria as the number of policies written for the
above referenced report data period, the number of claims received for the report data period, the number of suspected fraudulent claims
detected for the report data period, an assessment of optimal case load that can be handled by an SIU investigator for the report data period
and other factors that explain the level of staffing and resources.
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A description of education and training provided to underwriting and claims personnel to assist in identifying and evaluating instances of
suspected fraudulent acts in underwriting or claims activities.
A description of a public awareness program focused on the costs and frequency of insurance fraud and methods by which the public can
prevent it.
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Please note that if an insurance carrier is licensed to insure workers’ compensation coverage, but did not write WC coverage during the
reporting period (7-1-2010 to 6-30-2011) the carrier will activate a new account, select the carrier and submit a “No Data to Submit” report filing.
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The electronic Workers’ Compensation Anti-Fraud (WCAF) report filing is accessible by July 1, 2011 and will be available until September 30,
2011. The WCAF report filing can be accessed via
FLORIDA STATUTES, CHAPTER 626, IMUNITY STATUTE –
Protection against Civil Liability for providing information regarding
suspected fraudulent insurance acts.
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626.989 Investigation by department or Division of Insurance Fraud; compliance; immunity; confidential information; reports to division; division
investigator’s power of arrest.—
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(c) In the absence of fraud or bad faith, a person is not subject to civil liability for libel, slander, or
any other relevant tort by virtue of filing reports, without malice, or furnishing other information, without
malice, required by this section or required by the department or division under the authority granted in
this section, and no civil cause of action of any nature shall arise against such person:1. For any
information relating to suspected fraudulent insurance acts or persons suspected of engaging in such
acts furnished to or received from law enforcement officials, their agents, or employees;
2. For any information relating to suspected fraudulent insurance acts or persons suspected of
engaging in such acts furnished to or received from other persons subject to the provisions of this
chapter;
3. For any such information furnished in reports to the department, the division, the National
Insurance Crime Bureau, the National Association of Insurance Commissioners, or any local, state, or
federal enforcement officials or their agents or employees; or
4. For other actions taken in cooperation with any of the agencies or individuals specified in this
paragraph in the lawful investigation of suspected fraudulent insurance acts.
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FLORIDA STATUTE CHAPTER 626 - DESIGNATED SIUs SHARING
INFORMATION WITH OTHER SIUs, CIVIL LIABILITY PROTECTION
F.S. 626.989(4)(d)
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(d) In addition to the immunity granted in paragraph (c), persons identified as designated
employees whose responsibilities include the investigation and disposition of claims relating to
suspected fraudulent insurance acts may share information relating to persons suspected of
committing fraudulent insurance acts with other designated employees employed by the same
or other insurers whose responsibilities include the investigation and disposition of claims relating
to fraudulent insurance acts, provided the department has been given written notice of the
names and job titles of such designated employees prior to such designated employees
sharing information. Unless the designated employees of the insurer act in bad faith or in
reckless disregard for the rights of any insured, neither the insurer nor its designated employees
are civilly liable for libel, slander, or any other relevant tort, and a civil action does not arise
against the insurer or its designated employees:
1. For any information related to suspected fraudulent insurance acts provided to an
insurer; or
2. For any information relating to suspected fraudulent insurance acts provided to the National
Insurance Crime Bureau or the National Association of Insurance Commissioners.
SIU INVOLVEMENT IN THE
INSURANCE CLAIM
Initiate SIU involvement by – the Claims Adjuster detecting at least one “Red Flag” or
possible “Fraud Indicators” and makes a Referral to SIU.
1. The SIU Investigator will meet with the claims adjuster personally, if possible.
2. SIU will review the claim for all elements of possible Fraud, as well as claims handling.
3. The SIU Investigator will then set an Action Plan for SIU tasks, and if necessary for the claims adjuster.
The SIU Investigator may do the following in their Action Plan;
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
Run background check on Claimant
Review tape of initial Loss Statement
Retrieve and review medical billing
SIU to go to the loss scene, photos, and canvass the area for witnesses, take statements
Go to the body shop, photos, interview shop repair person.
Order any specialty investigation, such as Cause & Origin, or accident reconstruction.
Consider ordering a surveillance
FWP Leads developed from initial investigation
Order and conduct an Examination Under Oath
Coordinate efforts with DIF, reporting suspicious claim to DIF
Participate in Claim File Conference
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augment the Insurance Company Claims Department in their fight
against insurance fraud.
* Claim File Review ID Fraud Issues
• SIU Action Plan
• Loss scene investigation
• Recorded Statements
• Surveillance
• EUOs
• Claim File Conference
• Referrals to DFS – DIF
• File Fraud Plans
• Fraud Awareness Training