Anti-fraud plan guidelines

Mission statement

A mission statement will allow a company to give direction to their insurance anti-fraud plan. However, a mission statement is not required.

Personnel

Companies should include the primary contact person(s) name, address, and telephone number. It is not necessary to include organizational charts, lists of other company representatives, or employee background information.

Definitions

Our office will be looking for references to both internal and external fraud. Internal fraud is defined as fraud committed by company employees or representatives. External fraud is defined as fraud committed by the general public or insureds. When reporting information involving these two areas, please use these definitions. 

1. Fraud prevention and detection procedures

A procedure to prevent insurance fraud, including internal fraud involving employees or company representatives, fraud resulting from misrepresentation on applications for insurance coverage, and claims fraud.

The plan must include;

• Company’s procedures to identify and deter fraudulent activity.
• Company's list of indicators used to determine if insureds may be perpetrating fraud and address the frequency of procedures.
• Outline measures used to detect fraud which may be made by an agent in an application or those used to determine if a company representative may be committing fraud.

Companies may not simply state that these checks are in place.

2. Fraud review and investigation

Review of claims in order to detect evidence of possible insurance fraud and have procedures in place for investigating claims where fraud is suspected.

The plan must include;

• Company’s procedures to research fraudulent activity once it is suspected.
• Company's specific guidelines on their investigative process.
• Outline outside resources used to investigate the matter, the timelines of an investigation, and how the investigation is monitored to completion.
• Commitment of personnel, such as company representatives, independent contractors, etc.

Companies may not simply state that these reviews are in place.

3. Referral of fraudulent activity to law enforcement

Direction to report fraud to appropriate law enforcement agencies and cooperate with those agencies in their prosecution of fraud cases.

The plan must include;

• A narrative as to procedures for reporting suspected fraudulent activity to law enforcement agencies, prosecutors, etc.
• Specific guidelines on reporting procedures and how they cooperate within the proceedings.
• Outline measures taken to work together with law enforcement officials.

Companies may not simply state that these activities are performed.

4. Civil action against fraudulent activity

Directive to undertake civil actions against persons who have engaged in fraudulent activities.

The plan must include;

• A narrative as to procedures developed for seeking restitution or other damages through either house counsel, independent counsel, or under criminal proceedings.
• Specific guidelines on procedures, who handles them, and how they are monitored.
• Method to monitor this activity.

Companies may not simply state that this activity is performed.

5. Fraud detection training plan

Training of company employees and agents in the detection and prevention of fraud.

The plan must include;

• Company's procedure to make all representatives aware of fraud and associated problems.
• Explanation on the type, frequency, and monitoring procedures for training being offered to all company employees and agents.
• Outline use of outside resources, informational mailings, or other continuing education mechanisms.

Companies may not include information pertaining to unrelated company training or simply state that fraud training is in place.