Chapter 12. Mandatory 1-Hour Agent/Broker Anti-Fraud Awareness Training

SIU staffing and operations requirement

insurers must maintain an SIU with trained staff or contract an external compliant company

SIU annual report

confidential report with insurer’s SIU data, due every June regardless of notification

anti-fraud training deadline for new hires

must be completed within 90 days of hire

anti-fraud training frequency

SIU staff must get 5+ hours of training each year

four parts of SIU compliance

staffing/operations, annual report, anti-fraud training, fraud detection/referral

penalty for inadvertent violation

up to $5,000; similar violations can be grouped

penalty for willful violation

up to $10,000 per act; violations are not grouped

red flag – behavior

doesn’t care about cost, rushes application, pays cash for high premium, no inspection wanted

red flag – application issues

vague answers, discrepancies, unrelated insured/beneficiary, unusual relationships

fraud indicators (not red flags)

vague/indirect answers, pushy, hesitant to sign, unexplained walk-ins

misrepresenting collateral

lying about the value or amount of owned property (e.g. artwork, jewelry)

theft of premiums

agent pockets money instead of applying it toward real insurance coverage

concealment of information

hiding relevant facts, like not listing all drivers in a household

Insurance Services Office (ISO)

database for fraud indicators, claim history, policy information

Arson database

maintained by CA Dept. of Justice, helps detect fraud in property policies