Current through Register Vol. 49, No. 9, September, 2024
SECTION 1. Purpose
The purpose of this rule is to assist insurers in complying with
the antifraud initiative requirements of Arkansas Code Annotated §
23-66-510.
SECTION 2. Authority
This rule is issued pursuant to the authority vested in the
commissioner by Arkansas Code Annotated §
23-66-511, and
other applicable provisions of Arkansas law.
SECTION 3. Applicability and Scope
This rule applies to all licensed insurers in the State of
Arkansas.
SECTION 4.
Effective Date
The effective date of this rule is August 1, 1997.
SECTION 5. Definitions
The definitions set forth in Arkansas Code Annotated §
23-66-501
shall apply to this rule.
SECTION
6. Antifraud Initiative Requirements
The antifraud initiative requirements of Arkansas Code Annotated
§
23-66-510(a)
may be satisfied by an insurer by means of:
(1) Fraud investigators, who may be insurer
employees or independent contractors and who are in full compliance with
Section (7) of this rule; or
(2) An
antifraud plan submitted to, and approved by, the commissioner, and which is in
full compliance with Section (8) of this rule; or
(3) An alternative antifraud initiative
submitted to, and approved by, the commissioner, under the provisions of
Arkansas Code Annotated §
23-66-510(a);
or
(4) An exemption from the
antifraud initiative requirements granted by the commissioner pursuant to
Arkansas Code Annotated §
23-66-510(b).
SECTION 7. Fraud Investigators and
Independent Contractors
A. Fraud
investigators who are employees of an insurer:
(1) shall be qualified by education,
experience or training in the detection, investigation and proper reporting of
suspected fraudulent insurance acts, and may be employees whose principal
responsibilities are the processing and disposition of claims, if they meet the
qualification requirements herein stated; and
(2) shall complete a minimum of three (3)
hours of continuing education annually in the detection, investigation and
proper reporting of suspected fraudulent insurance acts. The specific
curriculum, location and certification of said continuing education courses are
not mandated but shall be consistent with industry standards for continuing
education for insurance fraud prevention, detection, or
investigation.
B.
Independent contractors hired by an insurer as fraud investigators shall be
investigation companies licensed by the State of Arkansas under the provisions
of Arkansas Code Annotated §
17-40-201,
et seq., or duly exempted from licensure by the Arkansas Board of Private
Investigators and Private Security Agencies.
SECTION 8. Antifraud Plans
A. Antifraud plans shall be submitted to the
commissioner. for approval and shall outline specific procedures to:
(1) prevent, detect, and investigate
suspected fraudulent insurance acts;
(2) educate and train appropriate employees
in the insurer's antifraud plan, as well as in the identification of suspected
fraudulent insurance acts;
(3)
comply with the mandatory reporting requirements of Arkansas Code Annotated
§
23-66-505
and §
11-9-106(d)(6)
regarding suspected fraudulent insurance acts;
(4) increase awareness of the impact of
fraudulent insurance acts and the methods of preventing insurance
fraud;
(5) pursue civil remedies
for financial loss caused by fraudulent insurance acts, where appropriate;
and
(6) facilitate assistance and
communication with the Insurance Fraud Investigation Division of the Arkansas
Insurance Department by identifying a representative within the employ of the
insurer to act as a liaison on insurance fraud matters.
B. Each antifraud plan shall state a specific
implementation date and a mechanism for review of the plan for effectiveness,
which review shall be undertaken no less than every twenty-four (24)
months.
C. Amendments to an
approved plan shall be submitted to the commissioner within thirty (30) days
after their implementation.
SECTION
9. Severability
Any section or provision of this rule held by a court to be
invalid or unconstitutional will not affect the validity of any other section
or provision of this rule.
