California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 9 - Insurance Fraud
Article 2 - Special Investigative Unit
Section 2698.33 - SIU and Integral Anti-Fraud Personnel Contracted Responsibilities

Universal Citation: 10 CA Code of Regs 2698.33

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Any contract entered into by an insurer, or an entity under contract with an insurer for the performance of SIU or integral anti-fraud personnel duties or functions as provided under these regulations, shall not relieve the insurer of any obligation under these regulations or the IFPA.

(b) Notwithstanding any other provisions of these regulations, a complete and executed copy of any such agreement, including all attachments, exhibits and amendments thereto, shall be provided to the Fraud Division upon request by the Fraud Division.

(c) Any contract entered into by an insurer with a contracted entity under this section shall:

(1) Specify all SIU or integral anti-fraud personnel duties and functions to be performed by the parties to the contract and how the insurer monitors performance of the contract responsibilities;

(2) Not include provisions that could provide disincentives to the referral and/or investigation of suspected insurance fraud;

(3) Not include provisions that purport to relieve an insurer of any obligation to comply with the requirements of these regulations and the IFPA;

(4) Expressly require the contracted entity to comply with all applicable provisions of the IFPA and this article; and

(5) Expressly require the contracted entity to include the following provisions in any agreement the contracted entity may enter into with any subcontractor to perform SIU or integral anti-fraud personnel duties or functions for the contracted entity on behalf of the insurer:
(A) Subcontractor to provide entire agreement to the Fraud Division upon request: An express provision requiring that the contractor provide to the Fraud Division a complete and executed copy of any such agreement between the contractor and its subcontractor, including all attachments, exhibits and amendments thereto, upon request by the Fraud Division,

(B) Subcontractor to be bound by same requirements as contractor: An express provision that any such agreement between the contractor and its subcontractor shall conform to the requirements set forth in subdivisions (c)(1), (c)(2), (c)(3), and (c)(4) of this Section 2698.33, and

(C) Limitations on subcontractor contracting with other entities: An express provision that, in the event any subcontractor to the contracted entity contracts with any other entity or entities to perform SIU or integral anti-fraud personnel duties or functions on behalf of the insurer, the agreement between the subcontractor and the entity so contracted (hereinafter a "sub-subcontractor") shall contain the following provisions:
1. Sub-subcontractor to be bound by same requirements as contractor and subcontractor: The express provision described in subdivision (c)(5)(B) of this section,

2. Sub-subcontractor to provide entire agreement to the Fraud Division upon request: An express provision identical in substance to the provision described in subdivision (c)(5)(A) of this section, binding the subcontractor to provide, upon request by the Fraud Division, the documents specified in that subdivision (c)(5)(A) but with respect to the agreement between the subcontractor and its sub-subcontractor, and

3. No further subcontracting: An express provision prohibiting the sub-subcontractor from permitting, or contracting with, any other entity to perform the SIU or integral anti-fraud personnel duties or functions which the sub-subcontractor has contracted with the subcontractor to perform on behalf of the insurer.

(d) An insurer shall no later than April 1, 2021 ensure that the provisions described in subdivisions (c)(5)(A) through (c)(5)(C) of this section are included in any and all of its contracts with contracted entities for the performance of SIU or integral anti-fraud personnel duties or functions.

1. New section filed 9-4-2003 as an emergency; operative 9-4-2003 (Register 2003, No. 36). A Certificate of Compliance must be transmitted to OAL by 1-2-2004 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 1-2-2004 as an emergency; operative 1-3-2004. (Register 2004, No. 1). A Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 5-4-2004 as an emergency; operative 5-4-2004 (Register 2004, No. 19). A Certificate of Compliance must be transmitted to OAL by 9-1-2004 or emergency language will be repealed by operation of law on the following day.
4. Editorial correction of HISTORY 3 (Register 2004, No. 36).
5. New section refiled 9-1-2004 as an emergency; operative 9-1-2004 (Register 2004, No. 36). A Certificate of Compliance must be transmitted to OAL by 12-30-2004 or emergency language will be repealed by operation of law on the following day.
6. New section refiled 12-28-2004 as an emergency; operative 12-30-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 4-29-2005 or emergency language will be repealed by operation of law on the following day.
7. New section refiled 4-29-2005 as an emergency; operative 4-29-2005 (Register 2005, No. 17). A Certificate of Compliance must be transmitted to OAL by 8-29-2005 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as 4-29-2005 order, including repealer and new section, transmitted to OAL 8-26-2005 and filed 10-7-2005 (Register 2005, No. 40).
9. Amendment of section heading, section and NOTE filed 7-30-2020; operative 10-1-2020 (Register 2020, No. 31).

Note: Authority cited: Sections 1875.23, 1875.24, 1879.5 and 1879.6, Insurance Code; Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d. 805, 824, 258 Cal. Rptr. 161, 771 P.2d 1247; Credit Ins. Gen. Agents Assn. v. Payne (1976) 16 Cal.3d 651, 656, 128 Cal. Rptr. 881, 547 P.2d 993; and Garris v. Carpenter (1939) 33 Cal. App. 2d. 649, 653, 92 P.2d 688. Reference: Sections 1875.20, 1875.21, 1875.24, 1879.5, 12921(a) and 12926, Insurance Code.

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