As used in this article, the following definitions shall
apply:
(a) "Act" means any violation
of California Code of Regulations, Title 10,
Chapter 5, Section
2698.30-42, inclusive.
(b) "Authorized governmental agency
(agencies)" shall have the same meaning as used in the Insurance Frauds
Prevention Act (IFPA).
(c) "Claims
handler" means every employee and agent of an insurer whose principal
responsibilities include the investigation, adjustment, settlement, and
resolution of claims.
(d)
"Commissioner" means the Insurance Commissioner of the State of
California.
(e) "Communication"
includes the referral of suspected insurance fraud to the Department of
Insurance and providing information and documents requested by the Fraud
Division.
(f) "Contracted entity"
means any entity with which an insurer contracts to perform SIU or integral
anti-fraud personnel duties or functions on behalf of the insurer. "Contracted
entity" includes subcontractors and sub-subcontractors contracted to perform
SIU or integral anti-fraud personnel duties or functions on behalf of the
insurer. The term "contracted entity" does not include the insurer's
affiliates, or subsidiaries, with which the insurer contracts to perform SIU or
integral anti-fraud personnel duties or functions on behalf of the insurer.
"Contracted entity" does not include entities with whom an insurer, or another
of the insurer's contracted entities, contracts to provide an expert opinion on
a medical, technical, or scientific topic, or perform a discreet, specific
investigative task such as surveillance, accident reconstruction, background
checks, scene inspections, social media checks, interviews, witness canvassing,
Arising Out of Employment/Course of Employment (AOE/COE) investigations,
activity checks, or database vendor services including, but not limited to, ISO
ClaimSearch, LexisNexis, and Accurint, on behalf of the insurer in connection
with the insurer's performance of its SIU or integral anti-fraud personnel
duties or functions. However, the immediately preceding sentence
notwithstanding, entities that (1) participate in the claims handling function
of the insurer, (2) make decisions on behalf of the insurer with respect to the
insurer's SIU or integral anti-fraud functions, or (3) contract with other
entities to perform SIU or integral anti-fraud duties or functions on behalf of
the insurer, are included within the meaning of the term "contracted
entity."
(g) "Department" means the
California Department of Insurance.
(h) "Fraud Division" means the California
Department of Insurance Fraud Division formerly known as the Bureau of
Fraudulent Claims.
(i) "Hearing"
means an adjudicative proceeding initiated by the Insurance Commissioner
pursuant to the provisions of California Insurance Code section
1875.24(d).
(j) "Inadvertent" means
unintentional.
(k) "Insurer" means
every insurer admitted to do business in this state except the following:
(1) Reinsurers.
(2) Title insurers.
(3) Fraternal fire insurers.
(4) Fraternal benefit societies.
(5) Firemen, policemen, or peace officer
benefit and relief associations.
(6) Grant and annuity societies.
(7) Home protection.
(l) "Integral anti-fraud personnel" includes
insurer personnel who the insurer has not identified as being directly assigned
to its SIU but whose duties may include the processing, investigating, or
litigation pertaining to payment or denial of a claim or application for
adjudication of claim or application for insurance. These personnel may include
claims handlers, underwriters, policy handlers, call center staff within the
claims or policy function, legal staff, and other insurer employee
classifications that perform similar duties.
(m) "Reasonable belief" is a level of belief
that an act of insurance fraud may have or might be occurring for which there
is an objective justification based on articulable fact(s) and rational
inferences therefrom.
(n) "Red
flag" or "red flag event" means facts, circumstances, or events which, singly
or in combination, support(s) an inference that insurance fraud may have been
committed, and includes patterns or trends that may indicate fraud, facts or
circumstances present on a claim, and behavior or history of person(s)
submitting a claim or application.
(p) "Special Investigative Unit"
(SIU) means an insurer's unit or division that is established to investigate
suspected insurance fraud. The SIU may be comprised of insurer employees or by
contracting with other entities for the purpose of complying with applicable
sections of the Insurance Frauds Prevention Act (IFPA) for the direct
responsibility of performing the functions and activities as set forth in these
regulations.
(q) "Suspected
insurance fraud" includes any misrepresentation of fact or omission of 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, policy holder, applicant, or
provider; receipts; estimates; explanations of benefits (EOBs), medical
evaluations or billings; medical provider notes (commonly known as SOAPE notes:
Subjective complaint, Objective findings, Assessment, Plan and Evaluation);
Health Care Financing Administration (HCFA) forms; police and/or investigative
reports; relevant discrepancies in written or oral statements and examinations
under oath (EUO); unusual policy activity; and falsified or untruthful
application for insurance. An identifiable pattern in a claim history may also
suggest the possibility of suspected fraudulent claims activity. A claim may
contain evidence of suspected insurance fraud regardless of the payment
status.
(r) "The Insurance Frauds
Prevention Act" or "(IFPA)" shall refer to California Insurance Code sections
1871
through
1879.8.
(s) "Willful" means a purpose or willingness
to commit the act or make the omission referred to in the California Insurance
Code or in these regulations. The Commissioner shall use the factors set forth
at
California Code of Regulations, Title 10, Section
2591.3(d)(1)
(A-E) to determine whether or not an act is willful.
Notes
Cal. Code Regs. Tit. 10, §
2698.30
1. Repealer
of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
filed 9-4-2003 as an emergency; operative 9-4-2003 (Register 2003, No. 36). A
Certificate of Compliance must be transmitted to OAL by 1-2-2004 or emergency
language will be repealed by operation of law on the following
day.
2. Repealer of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
refiled 1-2-2004 as an emergency; operative 1-3-2004. (Register 2004, No. 1). A
Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency
language will be repealed by operation of law on the following
day.
3. Repealer of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
refiled 5-4-2004 as an emergency; operative 5-4-2004 (Register 2004, No. 19). A
Certificate of Compliance must be transmitted to OAL by 9-1-2004 or emergency
language will be repealed by operation of law on the following
day.
4. Editorial correction of HISTORY 3 (Register 2004, No.
36).
5. Repealer of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
refiled 9-1-2004 as an emergency; operative 9-1-2004 (Register 2004, No. 36). A
Certificate of Compliance must be transmitted to OAL by 12-30-2004 or emergency
language will be repealed by operation of law on the following
day.
6. Repealer of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
refiled 12-28-2004 as an emergency; operative 12-30-2004 (Register 2004, No.
53). A Certificate of Compliance must be transmitted to OAL by 4-29-2005 or
emergency language will be repealed by operation of law on the following
day.
7. Repealer of article 2 (sections
2698.40-2698.45), new article 2
(sections 2698.30-2698.42) and new section
refiled 4-29-2005 as an emergency; operative 4-29-2005 (Register 2005, No. 17).
A Certificate of Compliance must be transmitted to OAL by 8-29-2005 or
emergency language will be repealed by operation of law on the following
day.
8. Certificate of Compliance as 4-29-2005 order, including
repealer and new section, transmitted to OAL 8-26-2005 and filed 10-7-2005
(Register 2005, No. 40).
9. Amendment of article heading, amendment
of subsection (c), new subsection (f), subsection relettering and amendment of
newly designated subsections (j), (l), (n) and (q)-(s) filed 7-30-2020;
operative 10-1-2020 (Register 2020, No. 31).
Note: Authority cited: Sections
1872.4,
1875.24,
1877.3,
1879.5 and
1879.6,
Insurance Code; Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d. 805, 824, 258
Cal. Rptr. 161, 771 P.2d 1247; Credit Ins. Gen. Agents Assn. v. Payne (1976) 16
Cal.3d 651, 656, 128 Cal. Rptr. 881, 547 P.2d 993; and Garris v. Carpenter
(1939) 33 Cal. App. 2d. 649, 653, 92 P.2d 688. Reference: Sections
1875.20,
1875.21,
1875.24,
1879.5,
9080,
10970,
11400,
11520,
11760,
11880,
12400.1,
12743,
12921(a)
and
12926,
Insurance Code.
1. Repealer of
article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42)
and new section filed 9-4-2003 as an emergency; operative 9-4-2003 (Register
2003, No. 36). A Certificate of Compliance must be transmitted to OAL by
1-2-2004 or emergency language will be repealed by operation of law on the
following day.
2. Repealer of of article 2 (sections
2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section
refiled 1-2-2004 as an emergency; operative 1-3-2004. (Register 2004, No. 1). A
Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency
language will be repealed by operation of law on the following day.
3. Repealer of of article 2 (sections 2698.40-2698.45), new article 2 (sections
2698.30-2698.42) and new section refiled 5-4-2004 as an emergency; operative
5-4-2004 (Register 2004, No. 19). A Certificate of Compliance must be
transmitted to OAL by 9-1-2004 or emergency language will be repealed by
operation of law on the following day.
4. Editorial correction of
History 3 (Register 2004, No. 36).
5. Repealer of of article 2
(sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new
section refiled 9-1-2004 as an emergency; operative 9-1-2004 (Register 2004,
No. 36). A Certificate of Compliance must be transmitted to OAL by 12-30-2004
or emergency language will be repealed by operation of law on the following
day.
6. Repealer of article 2 (sections 2698.40-2698.45), new
article 2 (sections 2698.30-2698.42) and new section refiled 12-28-2004 as an
emergency; operative 12-30-2004 (Register 2004, No. 53). A Certificate of
Compliance must be transmitted to OAL by 4-29-2005 or emergency language will
be repealed by operation of law on the following day.
7. Repealer
of article 2 (sections 2698.40-2698.45), new article 2 (sections
2698.30-2698.42) and new section refiled 4-29-2005 as an emergency; operative
4-29-2005 (Register 2005, No. 17). A Certificate of Compliance must be
transmitted to OAL by 8-29-2005 or emergency language will be repealed by
operation of law on the following day.
8. Certificate of Compliance
as 4-29-2005 order, including repealer and new section, transmitted to OAL
8-26-2005 and filed 10-7-2005 (Register 2005, No. 40).
9. Amendment
of article heading, amendment of subsection (c), new subsection (f), subsection
relettering and amendment of newly designated subsections (j), (l), (n) and
(q)-(s) filed 7-30-2020; operative
10/1/2020
(Register
2020, No. 31).