Special Investigations Unit Program

In most states, insurance companies and employers (self-insureds) are required to report suspected fraudulent activities as it pertains to insurance transactions.  Normally, a SIU is established to investigate suspected insurance fraud.  The unit can be internal to the organization or out-sourced, depending on the client’s needs. 

What is insurance fraud? “Suspected Insurance Fraud” includes any misrepresentation of fact or information in fact pertaining to a transaction of insurance including claims, premium and application fraud.  These facts may include evidence of doctoring, altering or destroying forms, prior history of the claimant, policyholder, applicant or provider, receipts, estimates, explanations of benefits (EOB), medical of valuations for billings, medical provider notes, police or investigative reports, discrepancies in written or oral statements and examinations under oath (EUO), unusual policy activity and falsified or untruthful application for insurance. 

JDW believes for any (SIU) anti-fraud program to properly function, it starts with an evaluation of the client's needs.  This evaluation should include, but not limited to the following areas:

• Proper staffing - Determining the SIU’s ability to establish, operate and maintain an investigative component in accordance with regulations and company policy.
• Knowledge and experience - The SIU should be made up of employees who have knowledge and experience in general claims practices, analysis of claims for patterns of fraud, current trends in insurance fraud, education and training in specific red flags, red flag events, and other criteria indicating possible fraud.  The unit should have the ability to conduct effective investigations of insurance fraud and be familiar with insurance and related law when applicable. 
• Communication - The SIU needs to have the ability to effectively communicate with law enforcement on insurance fraud related matters.
• Policy and Procedures - Procedures need to be established and monitored to detect, identify, and refer suspected insurance fraud to law enforcement in a timely and legal manner.
• Training - Anti-fraud training needs to be established and “continuous” in order to effectively reduce the company's exposure to fraud and abuse.  Training should be provided at all employee classifications.

Once this evaluation is conducted, a customized program can be developed.  A strategic plan for basic claim investigations, as well as premium compliance issues, starts the fraud awareness process. JDW provides Special Investigations Unit Program services for its clients.  The program includes:

• State of California Anti-Fraud Plan Development (if required)
• Claim fraud awareness training-workers’ compensation
• Submission of Required DOI compliance documents
• Submission of Required DOI FD-1 (CA) forms on all suspicious fraud activity
• Managing electronic statistical data required for DOI yearly reporting
• Investigators with criminal investigations experience to properly investigate cases of insurance fraud
• Development and maintenance of a Fraud Hotline, which is client specific
• Ongoing quarterly training for investigators in regards to statutory updates, client needs, and advanced techniques of investigating insurance fraud cases
• Provide quarterly reports to the client outlining all SIU referrals received, case workflow, and disposition
• The implementation of a client recognition program for personnel who properly detect, refer, and assist in the prosecution of insurance fraud
• Routine claim audits to insure proper utilization of the Special Investigations Unit and required reporting to Department of Insurance
• Establishing a fraud hotline for employers to report potential fraudulent activity

As a part of our proactive SIU programs, J.D. Wesson & Associates, Inc. maintains relationships with prosecutors in the most responsive counties within the State of California.

J.D. Wesson & Associates, Inc. has determined a full-service SIU program focuses not only on criminal prosecution, but thorough investigations in the area of high exposure claims.  The Special Investigations Unit offers expertise to help mitigate losses in death claims, serious bodily injury claims, high exposure subrogation opportunities, and potential premium fraud issues.