California Anti-Fraud Regulations
Being compliant in CA takes experience, expertise, attention to detail, and just a little bit of crazy.
Last updated July 2021
Section 2698.39 - Anti Fraud Training:
(a) The insurer shall establish and maintain an ongoing anti-fraud training program, planned and conducted to develop and improve the anti-fraud awareness skills of the integral anti-fraud personnel.
(b) The insurer shall designate an SIU staff person to be responsible for coordinating the ongoing anti-fraud training program.
(c) The anti-fraud training program shall consist of three levels:
*Update 10/2020 - 2698.39 (c)(3)
The SIU personnel shall receive at least five (5) hours of continuing anti-fraud training per calendar year. The training shall include; instruction in one or more of the following topics:
*Update 10/2020 - 2698.39 (d)
The training requirements stated in subdivision (c) of this Section 2698.39 shall not apply to persons retained to provide an expert opinion on a medical, technical, or scientific topic on behalf of the insurer and who do not participate in the claims handling or decision making function of the insurer.
*Update 10/2020 - 2698.39 (e)
Training, instruction, or courses that may be used in order to satisfy the requirement stated in subdivision (c)(3) of this section shall include, without limitation: anti-fraud conferences; SIU round-tables hosted by the Fraud Division; anti-fraud association meetings and training; and insurer in-house training.
Section 2698.42 Penalties
(a) If the Commissioner acts pursuant to the provisions of California Insurance Code Section 1875.24( c) or (d) and finds that the insurer has failed to comply with the provisions of this article, the Commissioner shall impose a monetary penalty in an amount not to exceed $5,000 for each act of non-compliance. Where the Commissioner determines that an insurer has willfully failed to comply with this article, the Commissioner may impose a monetary penalty in an amount not to exceed $ 10,000 for each willful act of non -compliance.
Review the Complete CA SIU Anti Fraud Regulations - *Updated 10/2020
The link below will take you to the California DOI video (approx. 30 min) outlining the SIU Requirements for insurers. We have also included the blank certificate which should be downloaded and kept as proof that you watched the video.
On June 19, 2020, the California Department of Insurance (CDI) finalized their updates to the DOI Special Investigative Units (SIU) regulations regarding fraud compliance and SIU's in particular. Some of the key changes are contracted responsibilities, the investigation of suspected fraud, the referral of suspected fraud, and enhanced annual SIU training requirements.
The DOI is conducting 10x as many audits as before meaning new regulations are more dense, stringent, and increase the odds of being fined for failure to comply. Audits performed by the CA Departments of insurance can be up to $10,000 per finding.
Below is a link to download Dalene Bartholomew 's Whitepaper published in August 2020 regarding new DOI regulations and how to lessen your regulatory burden.
Dalene Bartholomew Whitepaper Fraud Reg Compliance Update CA.pdf
This document is the VRC SIU Policies and Procedures for your review.