Fraud Detection & Prevention Flashcards
7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fraud Detection & Prevention flashcards as text
Which data analytics technique is most effective for identifying organized fraud rings across multiple policyholders?
Answer: Social network analysis mapping relationships between claimants, providers, and attorneys
Social network analysis reveals hidden connections—shared phone numbers, addresses, or attorneys—among claimants that indicate coordinated fraud rings.
Under the Health Insurance Portability and Accountability Act (HIPAA), when can an insurer share medical claim data with its SIU for fraud investigation without patient authorization?
Answer: When the disclosure is for healthcare fraud and abuse detection purposes
HIPAA's fraud exception permits covered entities to disclose PHI for healthcare fraud and abuse detection without individual authorization.
What is the primary purpose of a 'fraud score' generated at the point of first notice of loss (FNOL)?
Answer: To prioritize claims for SIU referral based on risk indicators
Fraud scores at FNOL help claims handlers triage which claims warrant SIU investigation, enabling early intervention before payments are made.
Which ACORD form is used to report commercial general liability claims, and which field is most critical for fraud detection?
Answer: ACORD 5 — witness information
On the ACORD 5 (General Liability Notice of Occurrence/Claim), witness information is critical because fraudulent claims often lack credible independent witnesses.
A body shop submits identical repair estimates for 15 different vehicles of the same make and model following separate accidents. What fraud scheme does this most likely represent?
Answer: Collision repair fraud — using template estimates without actually inspecting vehicles
Template estimates submitted without actual vehicle inspections indicate collision repair fraud, where shops bill for work not performed or not needed.
In the context of the ACORD Data Standards, what does the 'prior carrier' field on an application help underwriters detect?
Answer: Gaps in coverage that may indicate unreported losses or policy cancellations for nonpayment/fraud
The prior carrier field enables underwriters to verify coverage history and identify coverage lapses that may indicate unreported losses or prior fraud.
Which best describes the 'fraud triangle' theory as applied to insurance fraud prevention?
Answer: Three conditions enabling fraud: opportunity, pressure/motive, and rationalization
The fraud triangle identifies opportunity, financial pressure/motive, and rationalization as the three conditions that must converge for fraud to occur.