Reporting Suspected Insurance Fraud

Dennis Pompa Associate Commissioner

512-463-6492

Reporting Requirements – Texas Ins Code §701.051

A person must report fraud not later than the 30th day after he makes a determination or reasonably suspects that a fraudulent insurance act has been or is about to committed in this state.

A person shall make the report of suspected fraud in writing to the insurance fraud unit.

The report shall be made in a format prescribed by the Fraud Unit or NAIC.

Texas Antifraud Plans

TIC §704.051 Antifraud Plan Required for Certain Plan Issuers Prescribes the statutory requirement for establishing

an antifraud plan.

TIC §704.054 Filing of Antifraud Plan Insurers may file their plan with the Fraud Unit

annually.

TDI’s Fraud Unit

Receives reports of suspected insurance fraud (10,000 yearly).

Interview suspects and witnesses.

Acquire and analyze financial, business, and legal documents; follow the flow of money.

Prepare comprehensive investigative reports for submission to a prosecuting agency.

Elements of a Comprehensive Suspected Fraud Report

Tell us about who was involved in the fraud. Provide as much identifying information on all

persons involved. Vehicles or personal property details.

Explain when the fraud occurred or when the claim was reported and how it was reported.

Where did the fraud occur. Explain efforts taken to contact parties involved in the

fraud.

Elements of a Comprehensive Suspected Fraud Report - Continued

Its important to know if the claim has been paid. Please include the amount, denied or pending $$.

Tell us why you suspect the claim is fraudulent.

Tell us about the documents you have to support your allegations.

Submit your contact information.

When Reporting Insurance Fraud

Submit a Copy of the Policy or Declaration page.

Submit an official affidavit attesting to the authenticity of the records.

Copies of recorded transcripts are good, but also include a duplicate copy of the audio recording.

Be Detailed Explain Everything

Fraud Trends

Theft of Premiums – Agents

Disability Fraud

Disappearing Auto’s (owner give up)

Medical Provider Fraud

Medical Identity Theft

Misrepresenting Beneficiary (health)

Fraud Trends - Continued

Unlicensed Health Ins Plans

Mortgage Fraud (Title – Escrow)

Disaster Fraud

Application Fraud – ID Theft

Disability Claim Fraud

Economic Related Fraud

Saddled With Debt, Some Decide to Torch Vehicles

TDI’s Investigation Process

Case assigned to an investigator who is responsible for developing additional facts.

90 day updates to the complainant.

Concluded investigation submitted to a prosecuting agency having venue over the offense.

Recent Fraud CaseBrenda Buckaloo-Merchant, a former supervising claims adjuster schemed to approve claims and divert payment checks over $1.2 Million to a fictitious health care provider that was in reality her. She used the money for personal purchases including foreign travel, gambling, gifts for friends, and her local ministry.

She plead guilty in Dallas to 1st Degree Felony Theft, sentenced to twelve years in the Texas Department of Corrections, fined $3,000, and ordered to pay restitution of $1,208,316.

Hurricane Ike Fraud Stat’s Reports of Fraud

76 Agent Fraud 23 Adjuster Fraud 428 Disaster Claim Fraud

Cases Opened for Investigation 31 Agent Fraud 1 Adjuster Fraud 60 Disaster Claim Fraud

Cases Referred for Prosecution 10 Agent Fraud 18 Disaster Claim Fraud

Statistics – Fiscal Year 2009Fraud reports received 11,021

Calls received toll-free Hotline 5,451

Cases opened for investigation 637

Cases referred for prosecution 206

Amount of fraud identified in referred cases $18,079,014

Indictments resulting from investigations 148

Convictions from cases referred 125

Restitution assessed by courts on Fraud Unit cases $7,449,148

Subpoenas issued 439

Open records requests processed 145

www.tdi.state.tx.us Fraud Resources Link’s

Annual Fraud Conference

Annual Report to the Commissioner

Top 10 Cases for FY 2009

Search engine for insurance fraud indictments and convictions.

On-line reporting for consumer’s and SIU’s.

Agent Fraud Claim Fraud Workers’ Comp Fraud

1-888-327-8818www.tdi.state.tx.us

Sponsored by the Texas Department of Insurance