Current through Register Vol. 46, No. 39, September 25, 2024
(a) Every insurer writing private or
commercial automobile insurance, workers' compensation insurance, or
individual, group or blanket accident and health insurance policies issued or
issued for delivery in this State, which writes 3,000 or more of such policies
in any given year, and every entity licensed pursuant to article 44 of the
Public Health Law, except those entities with an enrolled population of less
than 60,000 persons in the aggregate and except those entities certified
pursuant to sections
4403-a,
4403-c,
4403-d,
4403-f and
4408-a of
the Public Health Law, shall develop and file with the superintendent a plan
for the detection, investigation and prevention of fraudulent insurance
activities in this State and those fraudulent insurance activities affecting
policies issued or issued for delivery in this State. Notwithstanding the
foregoing, insurers writing only reinsurance contracts shall not be required to
comply with the provisions of this section.
(b) The plan shall include the following
provisions:
(1) establishment of a full-time
Special Investigations Unit separate from the underwriting or claims functions
of the insurer, which shall be responsible for investigation of cases of
suspected fraudulent activity and for implementation of the insurer's fraud
prevention and reduction activities under the Fraud Prevention Plan. In the
alternative the insurer may contract with a provider of services to perform all
or part of this function, but shall remain primarily responsible for the
development and implementation of its Fraud Prevention Plan. The agreement
under which such services are provided shall be filed with the Insurance Frauds
Bureau as part of the fraud prevention plan, and must provide for specified
levels of staffing devoted to the investigation of suspected fraudulent claims.
In the event that investigators employed by a provider of services will be
working for more than one insurer or on cases in states other than New York,
the plan must apportion the percentage of the investigator's efforts which will
be devoted to working for the insurer on its New York cases. The agreement
shall also require that the provider of services cooperate fully with the
Insurance Department in any examination of the implementation of the Fraud
Prevention Plan, and provide any and all assistance requested by the Insurance
Frauds Bureau, any other law enforcement agency or any prosecutorial agency in
the investigation and prosecution of insurance fraud and related
crimes;
(2) a description of the
organization of the Special Investigations Unit, including the titles and job
descriptions of the various investigators and investigative supervisors, the
minimum qualifications for employment in these positions in addition to those
required by this regulation, the geographical location and assigned territory
of each investigator and investigative supervisor, the support staff and other
physical resources, including database access available to the unit and the
supervisory and reporting structure within the unit and between the unit and
the general management of the insurer. If investigators employed by the unit
will be responsible for investigating cases in more than one state, the plan
must apportion that percentage of the investigators' efforts which will be
devoted to New York cases;
(3) the
rationale for the level of staffing and resources being provided for the
Special Investigations Unit which may include, but is not limited to the
following objective criteria such as number of policies written and individuals
insured in New York, number of claims received with respect to New York
insureds on an annual basis, volume of suspected fraudulent New York claims
currently being detected, other factors relating to the vulnerability of the
insurer to fraud, and an assessment of optimal caseload which can be handled by
an investigator on an annual basis;
(4) a description of the relationship between
the Special Investigations Unit and the claims and underwriting functions of
the insurer, including procedures for detecting possible fraud, criteria for
referral of a case to the unit for evaluation, and the designation of the
individuals authorized to make such a referral; and a description of the
relationship between the unit and the Insurance Frauds Bureau, other law
enforcement agencies and prosecutors, including procedures for case
investigation, detection of patterns of repetitive fraud involving one or more
insurers, criteria for referral of a case to the Insurance Frauds Bureau,
designation of the individuals authorized to make such referrals, and a policy
to avoid duplication of effort due to concurrent referrals by the unit to more
than one law enforcement agency;
(5) provision for the reporting of fraud data
to a data collection firm to be designated by the superintendent;
(6) provision for in-service training
programs for investigative, underwriting and claims personnel in identifying
and evaluating instances of suspected insurance fraud, including an
introductory training session and periodic refresher sessions. This description
shall include course descriptions, the approximate number of hours to be
devoted to these sessions and their frequency;
(7) provision for coordination with other
units of the insurer to further fraud investigations, including a periodic
review of claims and underwriting procedures and forms for the purpose of
enhancing the ability of the insurer to detect fraud and to increase the
likelihood of its successful prosecution, and for initiation of civil actions
where appropriate;
(8) development
of a public awareness program focused on the cost and frequency of insurance
fraud, and methods by which the public can prevent it;
(9) development of a fraud detection and
procedures manual for use by underwriting, claims and investigative personnel;
and
(10) timetable for the
implementation of the fraud prevention plan, provided however, that the period
of implementation shall not exceed six months from the date the plan is
approved.
(c) Persons
employed by Special Investigations Units as investigators or by an independent
provider of investigative services under contract with an insurer shall be
qualified by education and/or experience which shall include:
(1) an associate's or bachelor's degree in
criminal justice or a related field;
(2) five years of insurance claims
investigation experience or professional investigation experience with law
enforcement agencies;
(3) seven
years of professional investigation experience involving economic or insurance
related matters; or
(4) an
authorized medical professional to evaluate medical related claims.
Notwithstanding these minimum requirements anyone employed
as an investigator in a special investigation unit or by a provider of
investigative services under contract to an insurer as of the effective date of
this amendment and who was also so employed on or before September 10, 1996 may
continue in such employment provided the insurer identifies such person in
writing to the superintendent giving the date such employment began and a
description of the person's qualifications, employment history and current job
duties.
(d)
Every insurer required to file a fraud prevention plan shall file an annual
report with the Insurance Frauds Bureau no later than January 15th of each year
on a form approved by the superintendent, describing the insurer's experience,
performance and cost effectiveness in implementing the plan and its proposals
for modifications to the plan to amend its operations, to improve performance
or to remedy observed deficiencies. The report shall be reviewed and signed by
an executive officer of the insurer responsible for the operations of the
Special Investigations Unit.
