UPDATED: Proposed Florida Insurer Anti-Fraud Investigation Unit Rule Comment Period Begins Today, January 10, 2018

UPDATED:  Please note the proposed Rule markup added below.

Requirements for insurers to establish and maintain anti-fraud investigation units will be the subject of a Florida Division of Investigative and Forensic Services Rule Hearing on February 5, 2018 if is requested by any interested parties during the comment period, which opened today, January 10, 2018.

By opening Rule 69D-2.002, F.A.C., entitled “Definitions;” Rule 69D-2.003, F.A.C. relating to Insurer Special Investigative Units; and Rule 69D-2.005, F.A.C. “Compliance and Enforcement,” the proposed amendments will seek to implement changes to Section 626.9891, F.S. enacted by Chapter 2017-178, Laws of Florida.

The new law provides for the establishment of uniform anti-fraud prevention standards applicable to all insurers.   It also requires all insurers to establish and maintain an anti-fraud investigation unit, or to contract for such services, and to submit an anti-fraud plan to the Florida Department of Financial Services.

Rule 69D-2.002, F.A.C., adds definitions of the terms “anti-fraud investigative unit,” “Commission,” and “designated anti-fraud unit or division.”

Rule 69D-2.003, F.A.C., adopts a form that an insurer can use to comply with the anti-fraud plan filing requirements of Section 626.9891, F.S. Rule 69D-2.005, F.A.C., is amended to reflect statutory changes.

The deadline to submit written comments is January 31, 2018.

A markup of the proposed Rules is provided below, or click here.

69D-2.002 Definitions.

For the purposes of this rule chapter:

(1) “Anti-fraud investigative unit” means the designated anti-fraud unit or division, or contractor authorized under subparagraph 626.9891(2)(a)2., F.S.

(2) “Commission” means the Financial Services Commission.

(3) “Designated anti-fraud unit or division” means a distinct unit or division or a unit or division made up of employees whose principal responsibilities are the investigation and disposition of claims and who are also assigned to investigate and report possible fraudulent insurance acts.

(4)(1) “Division” means refers to the Department of Financial Services, Division of Forensic and Investigative Services Insurance Fraud.

(2) “NAIC” refers to the National Association of Insurance Commissioners.

(5)(3) “Office” means refers to the Office of Insurance Regulation.

(4) “SIU” refers to an insurer’s internal or contracted anti-fraud investigative unit.

Rulemaking Authority 624.308, 626.9891(10) , 626.9891(8) FS. Law Implemented 624.307, 626.9891(8) FS. History–New 10-5-06, Amended__________.

 

69D-2.003 Insurer Anti-Fraud Plans SIUs.

(1) An insurer subject to subsection 626.9891(2) (1), F.S., shall file with the Division a completed insurer anti-fraud plan detailed description of their SIU, and shall submit the plan electronically via the Division’s website at www.myfloridacfo.com. The completed plan shall be submitted on Form DFS-L1-1689, Anti-Fraud Plan (Rev. 10/17), which is hereby incorporated by reference and available on the Division’s website. The insurer’s filing of the information required on Form DFS-L1-1689 shall constitute an adequately detailed description of its designated anti-fraud unit as required by subsection 626.9891(2), F.S. An insurer that elects to contract with others to investigate and report possible fraudulent insurance acts pursuant to subparagraph 626.9891(2)(a)2., F.S., shall also electronically file a copy of the executed contract with the Division. following information in the SIU description to satisfy this filing requirement:

(a) The names of all personnel assigned to the SIU, and a description of each person’s work responsibilities relating to the SIU’s anti-fraud efforts.

(b) An acknowledgment that the SIU has established criteria that will be used to detect suspicious or fraudulent activity during investigations relating to the different types of insurance offered by that insurer.

(c) An acknowledgment that the SIU has established criteria that will be used for the investigation of acts of suspected insurance fraud relating to the different types of insurance offered by that insurer.

(d) An acknowledgment that the insurer or SIU shall report all suspected fraudulent insurance acts directly to the Division electronically via Form DFS-L1-1691 (Eff. 10-5-06) “Suspected Fraud Referral Form,” or an electronic reporting interface that is linked to such form, as provided on the Division’s website at www.myfloridacfo.com. Form DFS-L1-1691 (eff. 10-5-06) Suspected Fraud Referral Form is hereby adopted and incorporated by reference.

(e) An acknowledgment that all such reports of suspected insurance fraud shall contain information that clearly defines and supports the allegation of suspicious activity.

(f) An acknowledgment that the insurer or SIU shall record the date that suspected fraudulent activity is detected, and shall record the date that reports of such suspected insurance fraud are sent directly to the Division.

(g) An acknowledgment that the insurer or SIU shall provide training relating to the detection and investigation of fraudulent insurance acts for all personnel involved in anti-fraud related efforts.

(h) An acknowledgment that the insurer or SIU shall provide on-going training during the reporting period.

(i) The contact information including names, email addresses, and telephone numbers, for personnel designated by the insurer or SIU to be responsible for achieving and maintaining compliance with Section 626.9891(1), F.S., and this rule chapter.

(j) The insurer’s NAIC individual and group code numbers.

(2) The following information must be included in the insurer’s anti-fraud plan:

(a) An acknowledgment that all reports of suspected insurance fraud shall contain information that clearly defines and supports the allegation of suspicious activity.

(b) An acknowledgment that the insurer or anti-fraud investigative unit shall record the date that suspected fraudulent activity is detected, and shall record the date that reports of such suspected insurance fraud are sent directly to the Division.

(2) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, shall submit this SIU description electronically via the Division’s website at www.myfloridacfo.com. The SIU description shall be submitted electronically on Form DFS-L1-1689 (Eff. 10-5-06) “SIU Description Form” as provided on the Division’s website at www.myfloridacfo.com. Form DFS-L1-1689 (eff. 10-5-06) SIU Description Form is hereby adopted and incorporated by reference. The insurer’s filing of the information required in subsection (1) above shall constitute an adequately detailed description of its SIU as required by Section 626.9891(1), F.S.

(3) Nothing in this rule shall require that the anti-fraud investigative unit an SIU utilize all established criteria in every circumstance.

(4) The filing of the information required herein is not intended to constitute a waiver of an insurer’s privilege, trade secret, confidentiality or any proprietary interest in its anti-fraud investigative unit SIU, its anti-fraud investigative unit SIU description, or its anti-fraud investigative unit SIU policies and procedures.

Rulemaking Authority 624.308, 626.9891, 626.9891(8) FS. Law Implemented 624.307, 626.989, 626.9891(1) FS. History–New 10-5-06, Amended __________.

69D-2.005 Compliance and Enforcement.

(1) The Division shall review the filings of SIU descriptions and insurer anti-fraud plans and the Office may conduct audits pursuant to Section 624.3161, F.S., to determine compliance with Section 626.9891, F.S., and this rule chapter.

(2) If an insurer fails to timely file an anti-fraud plan or SIU description, fails to implement or follow the provisions of its anti-fraud plan or SIU description, fails to report the required data related to fraud for each identified line of business written by the insurer, or in any other way fails to comply with the requirements of Section 626.9891, F.S., and this rule chapter, the Department, Office, or Commission may take appropriate administrative action in accordance with Sections 626.9891(8) (7) and 624.4211, F.S., and Rule 69O-142.011, F.A.C.

Rulemaking Authority 624.308, 626.9891 FS. Law Implemented 624.307, 624.4211, 626.9891(7) FS. History–New 10-5-06, Amended 8-9-15, __________ .

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