FRAUD AWARENESSTRAINING

BYTHE SIU GROUP

INSURANCE FRAUDWhat is Insurance Fraud?

Any action taken by an individual with the intent to fraudulently obtain payment from an insurer is considered insurance fraud.

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)

INSURANCE FRAUD DEFINED817.234 False and fraudulent insurance claims.—

(1)(a) A person commits insurance fraud punishable as provided in subsection (11) if that person, with the intent to injure, defraud, or deceive any insurer:

1. Presents or causes to be presented any written or oral statement as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy or a health maintenance organization subscriber or provider contract, knowing that such statement contains any false, incomplete, or misleading information concerning any fact or thing material to such claim;

2. Prepares or makes any written or oral statement that is intended to be presented to any insurer in connection with, or in support of, any claim for payment or other benefit pursuant to an insurance policy or a health maintenance organization subscriber or provider contract, knowing that such statement contains any false, incomplete, or misleading information concerning any fact or thing material to such claim;

3.a. Knowingly presents, causes to be presented, or prepares or makes with knowledge or belief that it will be presented to any insurer, purported insurer, servicing corporation, insurance broker, or insurance agent, or any employee or agent thereof, any false, incomplete, or misleading information or written or oral statement as part of, or in support of, an application for the issuance of, or the rating of, any insurance policy, or a health maintenance organization subscriber or provider contract; or

b. Knowingly conceals information concerning any fact material to such application; or

4. Knowingly presents, causes to be presented, or prepares or makes with knowledge or belief that it will be presented to any insurer a claim for payment or other benefit under a personal injury protection insurance policy if the person knows that the payee knowingly submitted a false, misleading, or fraudulent application or other document when applying for licensure as a health care clinic, seeking an exemption from licensure as a health care clinic, or demonstrating compliance with part X of chapter 400.

(b) All claims and application forms must contain a statement that is approved by the Office of Insurance Regulation of the Financial Services Commission which clearly states in substance the following: “Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree.” This paragraph does not apply to reinsurance contracts, reinsurance agreements, or reinsurance claims transactions.

(2)(a) Any physician licensed under chapter 458, osteopathic physician licensed under chapter 459, chiropractic physician licensed under chapter 460, or other practitioner licensed under the laws of this state who knowingly and willfully assists, conspires with, or urges any insured party to fraudulently violate any of the provisions of this section or part XI of chapter 627, or any person who, due to such assistance, conspiracy, or urging by said physician, osteopathic physician, chiropractic physician, or practitioner, knowingly and willfully benefits from the proceeds derived from the use of such fraud, commits insurance fraud, punishable as provided in subsection (11). In the event that a physician, osteopathic physician, chiropractic physician, or practitioner is adjudicated guilty of a violation of this section, the Board of Medicine as set forth in chapter 458, the Board of Osteopathic Medicine as set forth in chapter 459, the Board of Chiropractic Medicine as set forth in chapter 460, or other appropriate licensing authority shall hold an administrative hearing to consider the imposition of administrative sanctions as provided by law against said physician, osteopathic physician, chiropractic physician, or practitioner.

(b) In addition to any other provision of law, systematic up-coding by a provider, as defined in s. 641.19(14), with the intent to obtain reimbursement otherwise not due from an insurer is punishable as provided in s. 641.52(5).

ANY LICENSED HEALTH CARE PROVIDER; MEDICAL DOCTOR, OSTEOPATH, AND CHIROPRATOR FOUND GUILTY OF FRAUD WILL BE REVIEWED BY THEIR BOARD FOR POSSIBLE DISCIPLINARY ACTION AGAINST THEIR LICENSE.

(3) Any attorney who knowingly and willfully assists, conspires with, or urges any claimant to fraudulently violate any of the provisions of this section or part XI of chapter 627, or any person who, due to such assistance, conspiracy, or urging on such attorney’s part, knowingly and willfully benefits from the proceeds derived from the use of such fraud, commits insurance fraud, punishable as provided in subsection (11).

ATTORNEYS AND THEIR EMPLOYEES ARE SUBJECT TO THE FRAUD LAW AS WELL

(4) Any person or governmental unit licensed under chapter 395 to maintain or operate a hospital, and any administrator or employee of any such hospital, who knowingly and willfully allows the use of the facilities of said hospital by an insured party in a scheme or conspiracy to fraudulently violate any of the provisions of this section or part XI of chapter 627 commits insurance fraud, punishable as provided in subsection (11). Any adjudication of guilt for a violation of this subsection, or the use of business practices demonstrating a pattern indicating that the spirit of the law set forth in this section or part XI of chapter 627 is not being followed, shall be grounds for suspension or revocation of the license to operate the hospital or the imposition of an administrative penalty of up to $5,000 by the licensing agency, as set forth in chapter 395.

HOSPITALS AND HEALTHCARE FACILITIES LICENSED UNDER F.S. 395

(5) Any insurer damaged as a result of a violation of any provision of this section when there has been a criminal adjudication of guilt shall have a cause of action to recover compensatory damages, plus all reasonable investigation and litigation expenses, including attorneys’ fees, at the trial and appellate courts.

RECOVERING DAMAGES

SOLICITATION(8)(a) It is unlawful for any person intending to defraud any other person to solicit or cause to be solicited any business from a person involved in a motor vehicle accident for the purpose of making, adjusting, or settling motor vehicle tort claims or claims for personal injury protection benefits required by s. 627.736. Any person who violates the provisions of this paragraph commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. A person who is convicted of a violation of this subsection shall be sentenced to a minimum term of imprisonment of 2 years.

(b) A person may not solicit or cause to be solicited any business from a person involved in a motor vehicle accident by any means of communication other than advertising directed to the public for the purpose of making motor vehicle tort claims or claims for personal injury protection benefits required by s. 627.736, within 60 days after the occurrence of the motor vehicle accident. Any person who violates this paragraph commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

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 OFFICERFLORIDA DEPARTMENT OF FINANCIAL SERVICES, DIVISION OF INSURANCE FRAUD _________________________________________ 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

PIP Fraud 50% at 6,699

FOLLOWED BY:

WORKERS’ COMP 11% AT 1,495

VEHICLE FRAUD 7% AT 1,008

Record Setting First Quarter for Florida Division of Insurance Fraud

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.

With a 100-year heritage, the National Insurance Crime Bureau (NICB) is the nation's premier not-for-profit

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. 

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.

NICB Reports a 19 Percent Rise in Questionable Claims Since 2009

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 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

CLAIMS ADJUSTER DUTIES AND RESPONSIBILITIES REGARDING FRAUD

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.All claims that an element of fraud was detected should be referred to DFS, Division of Insurance Fraud.

*** When we all take these steps in handling claims we help provide a better product to the public.

BE AWARE AND DETECT “POSSIBLE FRAUD” INDICATORS

RED FLAGS FOR POSSIBLE WORKERS COMP FRAUD AND ABUSE

The Injured Employee - Has injuries that are inconsistent with facts of the accident. Provides multiple versions of how the accident occurred. Refuses medical tests or examinations to confirm an injury. Stays out of work longer than the doctor prescribed. Protests excessively about a modified position or returning to work

and never seems to improve. Has a suspicious prior history of reporting subjective injuries. Has a questionable identity, residence or contact information Was experiencing financial difficulties prior to submission of a

claim and inquires about a quick claim settlement. Is retiring, on probation, involved in a labor dispute, disgruntled,

a poor job performer or subject to disciplinary action. Is a new employee, nomadic, a seasonal worker or on short-term

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 Vehicle Theft Fraud

Indicators of Fraud Concerning the Insured

* 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) 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

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

coverageMore indicators on the next slide -

Indicators of Fraud related to the vehicle – CONT’D 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 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 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 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

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.

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.

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 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 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

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 Three or more occupants in the claimant or "stuck vehicle"; all of them report similar injuries.

All injuries are subjectively diagnosed, such as headaches, muscle spasms, traumas, and others.

Medical claims are extensive, but collision is minor with little physical damage to vehicle.

All of the claimants submit medical bills from the same doctor or medical facility.

Medical bills submitted are photocopies of originals.

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.

Vehicle driven by claimant is an old "clunker" with minimal coverage.

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 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.

MEDICAL RECORDSMEDICAL PROVIDER RECORDS□Clinical notes not in usual sequential order□All injuries are soft tissue□Bills for medical services not actually performed□Boilerplate medical reports□Detailed report and scant handwritten notes□No follow-up clinical notes supporting reports/billing statement□Evidence of preexisting condition not reflected in doctor’s reports□Extensive examination procedures/charges for apparent simple/routine injury/mild diagnosis□Extensive or unnecessary treatments for minor subjective injuries□Immediate referral for wide variety of psychiatric tests when original claim involved trauma only□Incorrect facts within the medical report□Inconsistencies between report and handwritten notes and claimant interview□Findings not consistent with mechanics of accident□Diagnosis not supported by documentation□Injuries all subjective (headache, nausea, depression, sleep problems, tenderness, etc.)□Multiple re-exams without necessity

MEDICAL RECORDS CONT’D

□ No x-rays, or if x-rays taken, no radiological report □ Final report indicates fully recovered when x-rays show chronic condition that cannot be reversed □ Patient information sheet shows attorney obtained prior to first visit □ Patient information sheet indicates claimant unemployed at time of accident but was actually employed □ Referral for treatment/testing to facility close to referring facility □ □ Referrals to several other providers who perform and bill for similar services □ Various injuries always receive same treatment □ Protracted treatment for extensive injuries for minor accident □ No final report □ No handwritten notes □ No patient information sheet for new patient □ No physical therapy progress reports

* Referrals to several other providers who perform and bill for similar services

Indicators of Lost Earnings Fraud 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.

FLORIDA STATUTES, CHAPTER 626 INSURANCEFRAUDULENT 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 Division of Insurance Fraud

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.  

ADD or DELETE A DESIGNATED EMPLOYEE:  Click on DIFSIUAdmin@MyFloridaCFO.com 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

Contact SIU Administrator:

Denise PratherSenior Management Analyst I200 East Gaines StreetTallahassee, Florida  32399-0324 DIFSIUAdmin@MyFloridaCFO.com

INSURANCE ANTI-FRAUD PLAN REPORTING TO DFS - DIF

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.

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.

Continued next slide -

69D-2.003 Insurer SIUs (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:

(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;

(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;

(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.

(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

(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

INSURANCE ANTI-FRAUD PLAN REPORTING TO DFS - DIF

Continued from last slide -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.

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 PLANSFILING WITH DFS - DIF

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.

Workers’ Compensation Annual Anti-Fraud Report Filing: 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.

The time period for 2010 reporting is July 1, 2010 through June 30, 2011 (but carriers may use a calendar year period 1-1-2010 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.

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WORKERS COMP ANTI-FRAUD PLAN FILING WITH DFS - DIF

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The report filing requires:

The dollar amount of recoveries and losses delineated by type of WC fraud.

The number of referrals submitted to the Bureau of Workers’ Compensation Fraud delineated by type of WC fraud.

A description of the organization of the SIU or anti-fraud unit including position titles and descriptions of staffing.

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.

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.

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.

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.

626.989 Investigation by department or Division of Insurance Fraud; compliance; immunity; confidential information; reports to division; division investigator’s power of arrest.—

(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.

FLORIDA STATUTE CHAPTER 626 - DESIGNATED SIUs SHARING INFORMATION WITH OTHER SIUs, CIVIL LIABILITY PROTECTIONF.S. 626.989(4)(d)

(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 THEINSURANCE 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. Run background check on ClaimantB. Review tape of initial Loss StatementC. Retrieve and review medical billingD. SIU to go to the loss scene, photos, and canvass the area for witnesses, take statements

E. Go to the body shop, photos, interview shop repair person.F. Order any specialty investigation, such as Cause & Origin, or accident reconstruction.

G. Consider ordering a surveillanceH. FWP Leads developed from initial investigationI. Order and conduct an Examination Under OathJ. Coordinate efforts with DIF, reporting suspicious claim to DIFK. Participate in Claim File Conference

THE SIU GROUPFraud Investigations & Security Consultants, LLC(904) 201-8321 (904) 463-5632 thesiugroup.com info@thesiugroup.com

WELCOME - THE SIU GROUP is a Florida based company, Fraud Investigations & Security Consultants, LLC, located in Jacksonville that provides SIU- Private Investigative Services in the following areas; Orlando, Tampa, Ft. Lauderdale, West Palm, SW Florida, and Jacksonville. These services include; EUO, Loss Scene, Claimant/Witness Recorded Statements, and Surveillance. Conducted by Florida licensed Private Investigators with prior in-house SIU and Claims Adjuster experience.************************************************************************Our associates are experienced and trained SIU Investigators and Claims Adjusters that provide Private Investigation services to 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