Life Settlement broker will establish and maintain an anti-fraud plan that will include systems to detect, prevent, eliminate and report suspected fraudulent activity. The system will include, but is not limited to, employee training, business procedures for detecting/tracking and reporting to state and federal authorities.
1. Description of the procedures for detecting and investigating possible fraudulent acts and procedures for resolving material inconsistencies between medical records and insurance applications.
- All incoming policies will be reviewed upon arrival for possible insurance fraud. The Procedure will involve the following:
- Life Settlement broker will attempt to obtain the original insurance application form from the Applicant.
- The Life Settlement broker will compare every file’s application for Life Settlement, medical records and the original insurance application for possible material inconsistencies.
- “Material Inconsistency” would mean:
- A difference between the diagnosis date reported by the applicant’s medical records and the diagnosis date in the original Insurance Application.
- A difference between the medical visitation record or hospitalization record or medication record of the applicant as reported on the application and the same information as reported by the insurer on the original Insurance Application.
- Any indication that the applicant has been declined for health insurance or life insurance that is noted on our application which is not noted on the original application for insurance.
- A difference between any physician’s name reported in the medical records as the treating physician at the time of diagnosis and the physician attending the applicant on the original insurance application.
If there are “material inconsistencies” between the two documents, the file will be declined with a report for filing with the Department of Commerce and Consumer Affairs and notification to the life settlement provider.
2. Description of procedures for the mandatory reporting of fraudulent insurance acts to the Department of Commerce and Consumer Affairs.
The Life Settlement broker shall handle all reporting of possible fraud to the Department of Commerce and Consumer Affairs.
- All possible violations will be submitted using the Department Form. The forms will be submitted to the Department of Commerce and Consumer Affairs.
- The form will be completed only so far as possible with the following items as attachments:
- Copies of the Life Settlement application and the life insurance application.
- A copy of the medical records submitted to us.
3. Description of the plan for anti-fraud training education and training of underwriters and other personnel.
- All employees shall have ready access to the Life Settlement broker to make inquires concerning the information they receive and the necessity of reporting that information.
- The Life Settlement broker shall train all employees with appropriate examples of possible instances of “material inconsistencies”.
- All other new employees are to be advised in writing of the anti-fraud program as part of their training and employment and provided with a copy of this document.
4. Description outlining organization arrangement of the anti-fraud personnel responsible for the investigation and reporting of possible insurance acts and investigating unresolved material inconsistencies between medical records and insurance applications.
- The Life Settlement broker will conduct monthly meetings with the entire staff to review and discuss continued anti-fraud awareness.
- All employees shall report possible fraud to the Life Settlement broker in writing and there will be an immediate cessation of any further work on the file.
- All “material inconsistencies” will be noted and reported to the Department of Commerce and Consumer Affairs after a five day waiting period during which the following communication will be made to the Owner:
Dear Sir (Madam).
We have noted material differences between either:
- Your application for insurance and your application to us.
- Your application for insurance and your medical records as supplied by your physician.
Under state law we are required to submit this information to the Department of Commerce and Consumer Affairs for possible investigation of possible insurance fraud. We regret that we have been provided with inaccurate information.
Please provide to us IMMEDIATELY (but not less than five business days) with information, which will allow us to reconcile these differences.
Please conduct yourself accordingly.
Life Settlement broker
- This letter shall be accompanied by the documents in question with the material inconsistencies highlighted.
- If the owner responds to the inquiry within five business days with an explanation of the inconsistency which is plausible and well documented, the file shall be re-opened for processing and no other communication will be made regarding the concern of activity involving this possible fraud.
Last Updated: 11/20/2017