Insurance Fraud and Weapons to Fight Fraud

Why Should You Attend:

Although insurance fraud has existed since the first policy was scratched on a clay tablet in ancient Sumeria, it has grown logarithmically. Insurers have attempted to manage the exposure to insurance fraud for centuries; the active insurer/police agency combination to reduce insurance fraud is relatively new. The use of Special Investigations Unit (SIU) fraud investigators and the weapons provided by statute and professional fraud investigators is bearing fruit. More fraud perpetrators are being charged and convicted of the crime of insurance fraud. Unfortunately, the number is still small and the dollars stolen by fraud seem to grow each year. It is incumbent, therefore, on all insurance company management; insurance claims personnel, insurance underwriting and sales personnel, private investigators and independent counsel understand insurance fraud and the weapons to fight fraud if a bigger dent is to be made in the amount of insurance fraud stolen from the insurance buying public.

This webinar highlights the multi-billion dollar crime that bleeds the insurance industry of potential profits. It explains what insurance fraud is, various methods by which insurance fraud is perpetrated, and the various weapons provided by statutory law, legal precedent and professional claims handling to work to reduce the amount stolen by fraud perpetrators. It explains the use of red flags or indicators of insurance fraud and the use of an insurance company SIU to gather the evidence necessary to assist in the defeat of insurance fraud.

Areas Covered in the Webinar:

• The meaning of insurance fraud.
• The statutory weapons available to reduce fraud.
• The common law weapons available to reduce fraud.
• Immunities available to insurers who report fraud.
• The red flags of fraud.
• The effective use of the SIU.

Who Will Benefit:

• Insurer Claims Executives
• Insurer claims representatives
• Independent Insurance adjusters
• Insurer SIU investigators
• Insurance agents and brokers
• Certified Fraud Examiners
• Operational Risk Managers
• Insurance coverage lawyers
• Insurance claims lawyers
• State or local police insurance fraud investigators
• Prosecutors

Instructor Profile:

Barry Zalma, Esq., CFE, has practiced law in California for more than 40 years as an insurance coverage and claims handling lawyer. Mr. Zalma now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally, for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

Zalma recently published ebooks - Insurance Claims: A Comprehensive Guide, published by the National Underwriter Company, October 2014; Mold Claims Coverage Guide, published by the National Underwriter Company, October 2014; Construction Defects Coverage Guide, published by the National Underwriter Company, October 2014; The Insurance Fraud Deskbook, Published by the American Bar Association, Tort and Insurance Practice Section, July 2014; MOM and the Taipei Fraud – Published as an e-book March 2014 by ClaimSchool, Inc.; Zalma on California SIU Regulations” published November 2013, by ClaimSchool, Inc.

Topic Background:

Insurance fraud continually takes more money each year than it did the last from the insurance buying public. Estimates of the extent of insurance fraud in the United States range from $87 billion to $300 billion every year. In truth no one really knows the extent of insurance fraud because most insurance fraud schemes succeed without the insurer even suspecting that it is being defrauded.

Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. No one will ever place an exact number on the amount lost to insurance fraud but everyone who has looked at the issue know – whether based on their heart, their gut or empirical fact of convictions for the crime of insurance fraud – that the number is enormous. When insurers and governments put on a serious effort to reduce the amount of insurance fraud the number of claims presented to insurers and the pseudo-insurers drops logarithmically.

Insurance fraud is not limited to the US. In Britain fraud costs the British economy amounts estimated as at least £14 billion as stated in a report commissioned by the Association of Chief Police Officers (ACPO) published in March 2007. Wherever insurance is written insurance fraud exists.

Insurers who do not exercise serious anti-fraud efforts will often complain that the local district attorneys and police agencies give a low priority to the crime of insurance fraud so that no matter how serious they work to prove fraud the authorities ignore them. Police and prosecutors complain that the insurers do nothing that police and prosecutors can use to prosecute the crime of insurance fraud.
Police and prosecutors must deal with insurers who are not equipped to perform an adequate criminal investigation. If prosecution of insurance fraud is to be successful it is necessary that insurers, prosecutors and police agencies work together as a team dedicated to defeat insurance fraud. Insurers must train their staff to recognize the elements of the crime of insurance fraud so that, while collecting information about a potential insurance fraud, they know the type and quality of information a prosecutor will need to take a criminal prosecution to a judge and jury.
Some estimates indicate that more money goes out fighting fraud than is saved. Although insurance fraud is a crime in almost every jurisdiction in the United States, it is the only crime where the victim is required to perform the investigation from its funds and to pay special taxes to support investigation and prosecution by public agencies. The Departments of Insurance across the country continues to add taxes on insurers and the insurance buying public to pay for the state’s portion of the fight against insurance fraud. Insurers are compelled by statute and Regulation to maintain Special Fraud Investigation Units, publish and fulfill a detailed anti-fraud program and train all of their anti-fraud personnel.

The Departments of Insurance audit insurers regularly to be sure that each insurer works hard to train its people to investigate and seek prosecution of the crime of insurance fraud. Failure to do so sufficiently allows the state Department of Insurance to fine the insurer for not doing the work traditionally the duty of the state to investigate and prosecute crime. In addition, adding insult to the injury, courts and juries assess punitive and exemplary damages against insurers who under the compulsion of the Departments of Insurance accuse their insured’s of fraud. If the insurer fails to prove the fraud and the police agencies, including the Departments of Insurance, fail to prosecute following the direction of the Departments of Insurance are dangerous because the immunity provisions of anti-fraud statutes are anemic.

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