The purpose of this rule chapter is to implement the provisions of Section 626.9891, Florida Statutes requiring a higher level of detail and accountability for insurer fraud plans and insurer SIU descriptions.

DEPARTMENT OF FINANCIAL SERVICES
Division of Insurance Fraud

RULE NO: RULE TITLE
69D-2.001: Purpose and Scope
69D-2.002: Definitions
69D-2.003: Insurer SIUs
69D-2.004: Insurer Anti-Fraud Plans
69D-2.005: Compliance and Enforcement
PURPOSE AND EFFECT: The purpose of this rule chapter is to implement the provisions of Section 626.9891, Florida Statutes requiring a higher level of detail and accountability for insurer fraud plans and insurer SIU descriptions.
SUMMARY: The rule would require the exact same disclosures for an SIU description (required for insurers who write more than 10 million in annual premium) as it would an anti-fraud plan (required for insurers who write less than 10 million in annual premium). The rule also sets deadlines for these submissions and necessitates that they be re-submitted every 3 years.
SUMMARY OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 624.308, 626.9891, FS.
LAW IMPLEMENTED: 624.307, 626.989, 626.9891(1), 626.9891(2), 626.9891(3), 626.9891(7), 626.9891(8), FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE TIME, DATE AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
TIME AND DATE: Tuesday, May 16, 2006, 9:00 a.m.
PLACE: Room 116 Larson Building, 200 East Gaines Street, Tallahassee, Florida.
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Serica Johnson at [phone], ext. 4216. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Charles Gowland, Jr., Division of Insurance Fraud, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0333, phone [phone].

THE FULL TEXT OF THE PROPOSED RULE IS:

69D-2.001 Purpose and Scope.

The purpose of this rule chapter is to implement the provisions of Section 626.9891, F.S., establishing guidelines and reporting requirements for insurer anti-fraud investigative units and anti-fraud plans.

Specific Authority 624.308, 626.9891, FS.; Law Implemented 624.307, 626.9891(8) FS., History–New________.

 

69D-2.002 Definitions.

For the purposes of this rule:

(1) “Division” refers to the Department of Financial Services, Division of Insurance Fraud.

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

(3) “Office” refers to the Office of Insurance Regulation, Market Investigations.

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

Specific Authority: 624.308, 626.9891, F.S.; Law Implemented: 624.307, 626.9891(8), F.S.; History-New________.

 

69D-2.003 Insurer SIUs.

(1) An insurer subject to Section 626.9891(1), F.S., shall file with the Division a deion of such SIU on or before July 1, 2006, and every three (3) years thereafter, and such deion shall include:

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

(b) A deion of the SIU’s procedures for detecting and investigating possible fraudulent insurance acts. This deion shall include:

1. 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;

2. 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;

3. Nothing in this rule shall require that an SIU utilize all established criteria in every circumstance.

(c) A deion of the SIU’s procedures for the mandatory reporting of suspected fraudulent insurance acts to the Division pursuant to Section 626.989(6), F.S. This deion shall include:

1. An explanation of the insurer’s or SIU’s method for reporting all suspected fraudulent insurance acts directly to the Division using a standard digital referral format as specified by the Division;

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

3. An acknowledgment that all such reports of suspected insurance fraud shall be reported directly to the Division within six (6) months of detection of the alleged suspicious activity, but within twelve (12) months if such alleged suspicious activity involves worker’s compensation insurance premium avoidance, and within eighteen (18) months if such alleged suspicious activity is in relation to a natural emergency as defined in Section 252.34(7), F.S.

4. An explanation of the insurer’s or SIU’s method of recording the date that suspected fraudulent activity is detected, and method of recording the date that reports of such suspected insurance fraud are sent directly to the Division;

(d) A deion of the SIU’s plan for anti-fraud education and training of its claims adjusters, SIU personnel, and any other personnel involved in anti-fraud related efforts. This deion shall include:

1. A plan that involves training relating to the detection and investigation of fraudulent insurance acts for all personnel involved in anti-fraud related efforts.

2. A plan that involves on-going training during the reporting period;

(e) 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;

(f) The insurer’s NAIC individual and group code numbers;

(2) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, shall submit this SIU deion via digital format as specified by the Division.

(3) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, will have a ninety (90) day grace period to submit their initial SIU deion, and will have a thirty (30) day grace period for each subsequent submission every three (3) years thereafter.

Specific Authority:  624.308, 626.9891, F.S.; Law Implemented: 624.307, 626.989, 626.9891(1), F.S.; History-New________.

 

69D-2.004 Insurer Anti-Fraud Plans.

(1) An insurer subject to Section 626.9891(2), F.S., shall file with the Division of Insurance Fraud such anti-fraud plan on or before July 1, 2006, and every three (3) years thereafter, and such anti-fraud plan shall include:

(a) A written deion or chart outlining the organizational arrangement of the insurer’s anti-fraud personnel who are responsible for the investigation and reporting of possible fraudulent insurance acts.

(b) A deion of the insurer’s procedures for detecting and investigating possible fraudulent insurance acts. This deion shall include:

1. An acknowledgment that the insurer 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;

2. An acknowledgment that the insurer 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;

3. Nothing in this rule shall require that an SIU utilize all established criteria in every circumstance.

(c) A deion of the insurer’s procedures for the mandatory reporting of possible fraudulent insurance acts to the Division pursuant to Section 626.989(6), F.S.  This deion shall include:

1. An explanation of the insurer’s method for reporting all suspected fraudulent insurance acts directly to the Division using a standard digital referral format as specified by the Division;

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

3. An acknowledgment that all such reports of suspected insurance fraud shall be reported directly to the Division within six (6) months of detection of the alleged suspicious activity, but within twelve (12) months if such alleged suspicious activity involves worker’s compensation insurance premium avoidance, and within eighteen (18) months if such alleged suspicious activity is in relation to a natural emergency as defined in Section 252.34(7), F.S.

4. An explanation of the insurer’s method of recording the date that suspected fraudulent activity is detected, and their method of recording the date that reports of such suspected insurance fraud are sent directly to the Division.

(d) A deion of the insurer’s plan for anti-fraud education and training of its claims adjusters and any other personnel involved in anti-fraud related efforts. This deion shall include:

1. A plan that involves training relating to the detection and investigation of fraudulent insurance acts for all employees involved in anti-fraud related efforts. 

2. A plan that involves on-going training during the reporting period;

(e) The contact information, including names, e-mail addresses, and telephone numbers, for personnel designated by the insurer to be responsible for achieving and maintaining compliance with Section 626.9891(2), F.S., and this rule chapter;

(f) The insurer’s NAIC individual and group code numbers;

(2) An insurer subject to Section 626.9891(2), F.S., and this rule chapter, shall submit this anti-fraud plan via digital format as specified by the Division.

(3) An insurer subject to Section 626.9891(2), F.S., and this rule chapter, will have a ninety (90) day grace period to submit their initial anti-fraud plan, and will have a thirty (30) day grace period for each subsequent submission every three years thereafter.

Specific Authority: 624.308, 626.9891, F.S.; Law Implemented: 624.307, 626.9891(2),(3), F.S.; History-New________.

 

69D-2.005 Compliance and Enforcement.

(1) The Division and the Office shall conduct audits or request self-assessment examinations of insurer SIU deions or anti-fraud plans as deemed necessary to determine compliance with Section 626.9891, F.S., and this rule chapter.

(2) If a review of a submission of an SIU deion or insurer anti-fraud plan reveals a deficiency in such deion or plan as determined by the Division, the insurer shall have thirty (30) days from the date of notification from the Division to repair such deficiency in their deion or plan and provide the Division with a corrected submission.  However, this additional thirty (30) day period does not apply in those situations where an insurer fails to submit their SIU deion or anti-fraud plan to the Division before the expiration of the thirty (30) or ninety (90) day grace period provided in this rule chapter.

(3) If an insurer fails to timely file an anti-fraud plan or SIU deion, fails to take corrective action as set forth in paragraph (2), fails to implement or follow the provisions of their anti-fraud plan or SIU deion, or in any other way fails to comply with the requirements of Section 626.9891, F.S., and this rule chapter, the Office shall take appropriate administrative action as provided in the Florida Insurance Code.

Specific Authority: 624.308, 626.9891, F.S.; Law Implemented: 624.307, 626.9891(7), F.S.; History-New________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Charles Gowland, Senior Attorney, Division of Insurance Fraud, Department of Financial Services.
NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: Eric Miller, Division Director, Division of Insurance Fraud, Department of Financial Services.
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: April 4, 2006
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: December 2, 2005 and February 10, 2006.