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Fraud investigation | Zalma on insurance

The purpose of an anti-fraud investigation is to gather evidence to determine whether a suspected fraudulent claim is legitimate or is actually an attempt to deceive the insurer.

If the facts reveal the claim is legitimate, the fraud investigation stops and the claim is paid. If the facts support the suspicion, additional evidence must be collected so that the insurer can successfully deny the claim and refuse to pay.

Training of investigators

The introduction of damages resulted in the insurance industry scared for many years from investigating fraud. Insurers avoided denying claims for fear that the latter would sue for bad faith. The insurers discouraged their adjusters from looking too close to claims. As a result, knowledgeable staff saw either another career or were dismissed by companies interested in improving their bottom line by hiring less experienced staff.

Insurance fraud is often expensive. The scale of insurance fraud, depending on which of the various estimates is believed, ranges from $ 80 billion to $ 300 billion each year. The sum is so huge that you understand the understanding. The insurers find that they cannot raise the premiums to honest insurance quickly enough to cover the amounts lost for fraud. They can't afford to let such a large amount of money lose their assets and destroy their profits without a fight.

The first defense to stop the bleeding of billions of dollars into fraud is a staff of well-trained, experienced and professional adjusters and investigators.

Although many adjusters will never witness the kinds of fraud described in this book, they must be trained to detect fraud and thus be equipped with sufficient knowledge to distinguish the suspects from the honest requirement. States are like California, requiring insurance companies to train all their injuries to recognize insurance fraud, insurance fraud attempts, and indicators or red flags in insurance fraud. Unfortunately, the laws and regulations that try to force the victim's victim, insurer, to investigate and prepare prosecution for the state, are more honest in crime than in the following.

What an anti-fraud must understand


  • all insurance contracts used by the insurer,
  • the rules applied by the courts for the interpretation of the insurance contract [1
    94595050] the law of fairness in the jurisdiction in which they operate,
  • ] the regulations issued by the insurance department of their state to enforce the Justice Proceedings Act
  • the statutes of their state which force the existence of an SIU,
  • The rules laid down by their State concerning the training and operation of SIU and the claimants, [
  • The Law on Contracts, the Law on Fraud [theInsurer'sObligationtoFightFraud
  • Specialist Knowledge for Different Types of Claims, such as:
  • Sufficient Medical Terminology to Understand Diagnoses of Doctors,
  • ] treatment of traumatic damage,
  • cost of reasonable medical b traumatic injury treatment,
  • methods for determining the extent of damage to structures or vehicles and the cost of repair or replacement
  • methods for determining the true market value of items of personal property, including vehicles,
  • interviewing techniques that facilitate the establishment of detailed information, negotiating capacity required to obtain fair, reasonable and acceptable settlement; and
  • the red flags of fraudulent claims.
  • This exercise does not happen overnight. It is a long order that requires each insurer to undertake to carefully train its adjusters and other casualties regarding the fraud indicators. Fraud education, using computer-aided training programs, is available for minimum costs from private providers such as Experfy.com, National Underwriter Company, IRMI, AD Banker, IRMI's WebCE, book Insurance Fraud and Anti-Fraud Weapons and other materials published by the author. In addition, there are various insurers produced programs as well as programs of independent business adjustments.

    Basic education of the classroom for insurance personnel is available throughout the country in local colleges and universities. Local colleges, colleges, universities and law firms will provide education at low or no cost. The education programs should be supplemented with meetings between supervisors and injury personnel on a regular basis to strengthen and supplement the information obtained.

    The insurer should also set up a regular program of audit application files to determine compliance with the topics studied to see how Effective Training was to detect and defeat fraudulent claims. Monthly meetings shall be held with claims for staff to reinforce what has been learned in the training sessions and to discuss current investigations where fraud is suspected.

    There is no quick and easy way to create insurance-accountable professionals who are knowledgeable about insurance fraud. The training takes time. Learning takes longer. The adjusters and other staff who take the fight against fraud seriously and apply it to existing requirements should be rewarded and honored for their skill. Without training on actual claims, the exercise is wasted.

    Red Flags of Fraud

    Suspected claims have common attributes. Insurers and their anti-fraud organizations have collected the common attributes of lists of indicators or red flags of fraud. The lists were created as training aids and are used to determine if further investigation is required to determine whether a claim is legitimate or false and fraudulent. Constantly growing, these lists are known as "red flags" or "indicators" of fraud lists. There are many different categories, ranging from those associated with the claim itself or with insurance to indicators of specific types of fraud, such as bodily injury fraud or arson for profit.

    When assessing an alleged three or more red flags, it is stated that the need for further investigation should be considered and evaluated by the claimant, a supervisor and the insurer's special investigation unit. The presence of red flags does not mean that a fraud has occurred. Red flags are just a signal to the adjuster to investigate further so that suspicion can either be removed or confirmed. It is not a single indicator that warns of the adjustment for the possibility of a fraudulent claim but a combination of the red flag or red flags was discovered in combination with the results of the thorough patent investigation.

    Although the existence of several red flags would trigger an investigation, failure to investigate has been kept reasonable as long as there are no patent rights or actual knowledge of false representations.

    Several red flags require reference to SIU

    When an adjuster identifies any fraudulent claim, it is often forwarded to a particular investigative unit (SIU). Most states require insurers, by law, to maintain an SIU. On average, 3% to 10% of receivables should be referred to an SIU for further investigation. An industry study conducted in the mid-1980s showed that by 1983, 47 out of 399 insurance companies had SIUs in operation a number that have become very up to today when approaching 100%.

    Although this figure represented only 10% of the companies participating in the survey, the 47 companies with SIUs accounted for over 50% of the industry's premium volume at that time. Today, as a result of statutory coercion, almost all insurance companies have an SIU. An effective SIU has a great return on investment and gives an insurer a competitive advantage with an effective SIU over the insurer without SIU or an inefficient SIU.

    Specifically for the training requirements of the state of California is Barry Zalmas e-Book, Insurance Fraud and Weapons to Defeat Fraud available on amazon.com. Volume One available as a Kindle book and a paperback. Volume Two Available as a Kindle Book and a Paperback

    © 2019 – Barry Zalma

    This article and all the blog posts on this site, melt and summarize issues published by the courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, condensed to facilitate reading and convey the author's views in each individual case.

    Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance management, bad faith assurance, and insurance fraud nearly equal for insurers and policyholders. He also serves as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance cover and law firm and more than 50 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

    Mr. Zalma is the first recipient of the first annual liability magazine / ACE Legend Award.

    Over the past 51 years, Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims to become insurance managers.

    "Arson-for-Profit Fire at Cowboy Bar & Grill"

    A true crime novel based on the perception of the author, Barry Zalma, who for over 51 years has acted for insurers facing the fire brigade, one of the most dangerous insurance fraud. The book explains how an insurance accountant, working with a fire protection and origin expert, a forensic accountant and insurance consultant, could defeat a system of urgent gain and get a judgment that requires the offender not to take anything and pay back

    Available as a Kindle -Book.

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