9255 Corbin Avenue
Suite 200
NORTHRIDGE CA 91324-2401
(800)
743-2524 
818-782-5887 Fax:
818-734-7847
The Need for an
Orientation Program For All Integral Anti-Fraud Personnel
California SIU Regulations Require Instant Fraud Training
(c) 2003 by Barry Zalma
Reprinted with Permission from Zalma's Insurance Fraud Letter, October 1, 2003
If your company is admitted to do insurance business in California you must recognize that the Department of Insurance has made almost every employee part of your integral anti-fraud personnel. It defines the term as follows
"Integral anti-fraud personnel" includes insurer personnel who the insurer has not identified as being directly assigned to its SIU (Special Fraud Investigation Unit) but whose duties may include the receipt, processing, investigating, or litigation pertaining to payment or denial of a claim or application. These personnel may include claims handlers, underwriters, agents, policy handlers, call center staff, legal staff, and other insurer employee classifications that perform similar duties. (italics added)
If you have not trained your people and if you do not have a training program in force you are in violation of the new California SIU Regulations. If you do not have a training program that can train all employees who fit within the definition of "integral anti-fraud personnel" within thirty (30) days of their employment you will be in violation of the SIU Regulations. The Regulations require every admitted insurer to train all
1. Claims Handlers;
2. Underwriters;
3. Agents;
4. Policy handlers;
5. Call center staff;
6. Legal staff; or
9. Other insurer employees that perform similar duties.
Very few people employed by an insurer are not included in this list.
:The Regulations require the following training
Section 2698.49 SIU Training
Requirements for training provided by and for the SIU shall include
(a) The SIU shall establish and maintain an ongoing anti-fraud training program, planned and conducted to develop and improve the anti-fraud awareness skills of the integral anti-fraud personnel.
(b) The insurer shall designate an SIU staff person to be responsible for the ongoing antifraud training program.
(c) The anti-fraud training program shall include instruction on
(1) The function and purpose of the SIU.
(2) Introduction/review of the written procedures established by the SIU regarding the identification, documentation and referral of incidents of suspected fraud to the SIU.
(3) Identification and recognition of red flags or red flag events.
(4) Any changes to current procedures for identifying, documenting and referring incidents of suspected insurance fraud to the SIU.
(5) Fraud Division insurance fraud reporting requirements.
(6) Introduction and review of existing and new, emerging insurance fraud trends.
(d) In addition to training provided to integral antifraud personnel provided herein, the SIU personnel shall receive anti-fraud training that include investigative techniques, communication with the Fraud Division and authorized governmental agencies, fraud indicators, emerging fraud trends, legal and related issues. This training shall be provided to SIU personnel by qualified and experienced entities in the subject matter being presented.
(e) All insurers shall provide an anti-fraud orientation program to all SIU and integral antifraud personnel within thirty (30) days after hire. Thereafter, insurers shall provide anti-fraud training to SIU and integral antifraud personnel on an annual basis.
The Regulations also require that the admitted insurer maintain "[
R]ecords of the anti-fraud training provided to all staff [and that it] shall be prepared at the time training is provided and be maintained and available for inspection by the Department on request. The training records shall include the title and date of the anti-fraud training course, name and title and contact information of the instructor(s), description of the course content, length of the training course, and the name and job title(s) of participating personnel."This onerous mandate is part of an emergency regulation. It carries with it the potential for serious fines for failure which include, but not limited to "a penalty of not more than $55,000 and/or suspension or revocation of the insurer’s Certificate of Authority." [Section 2698.52 (b).]
All admitted California insurers should be aware that the Emergency Regulation, in accordance with California Government Code Section 113461, takes effect upon filing and was effective, therefore, on August 20, 2003. Therefore if your company hired any new personnel after August 20, 2003 you were required to provide them with anti-fraud training and you were required to provide such training to all of your integral anti-fraud personnel within 30 days of August 20, 2003.
To assist insurers in California, ClaimSchool and its partner, Schifrin, Gagnon & Dickey's independent SIU, Fraud Investigation Management & Training Company ("FIMAT"), has created an "Orientation Program for Integral Anti-Fraud Personnel" that can be taken by any person equipped with a computer and web browser. A short test is provided that can be graded by FIMAT who will then issue a certificate.
If you are interested contact Peter Schifrin or Richard Harer at FIMAT, (818) 782-5887
, http://www.fimat.bz; fimat@fimat.bz; richard@fimat.bz, peter@fimat.bz or zalma@fimat.bz.9255 Corbin Avenue
Suite 200
NORTHRIDGE CA 91324-2401
'(818) 782-5887
Last Updated August 18, 2007