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The California Department of Insurance (DOI) has announced that it will soon begin conducting performance audits of all special investigation units (SIUs). The DOI wants to find out if the units are acting in compliance with regulations called for in the Fraud Prevention Act.
The Fraud Prevention Act requires companies to establish SIUs to track and report suspected fraud. Units are required to establish procedures to identify and investigate suspect claims, to initiate effective, educational fraud training programs and to make timely reports of suspected fraud to the DOI and the local district attorney’s offices.
Insurers who do not comply with the regulations face suspension of their operating authority in the state as well as monetary fines.