ACE Fraud Detection & Prevention 3

Question 1

Which technique is used by fraud rings to exploit the ACORD 80 (Homeowners Application) when committing property insurance fraud?

Accepted Answer

Falsifying prior loss history on Section IV

Answer

Falsifying prior loss history on the ACORD 80 conceals prior claims, allowing fraudsters to obtain coverage they would otherwise be denied or pay higher premiums for.

Question 2

In premium fraud, what does 'fronting' refer to?

Accepted Answer

Naming a low-risk driver as the primary insured when a high-risk driver is the actual primary user

Answer

Fronting involves listing a low-risk driver as primary to reduce premiums while the actual high-risk driver primarily uses the vehicle.

Question 3

Which ACORD standard is most relevant to electronic data interchange (EDI) in workers' compensation fraud reporting?

Accepted Answer

ACORD WCIO EDI

Answer

ACORD WCIO EDI standards govern electronic reporting of workers' compensation data, including first reports of injury that feed into fraud detection workflows.

Question 4

A claimant submits three water damage claims to different insurers within 18 months. What best describes this fraud pattern?

Accepted Answer

Hard fraud — fabricating losses to collect multiple payments

Answer

Submitting fabricated or repeated claims to multiple insurers to collect overlapping payments is a classic hard fraud pattern.

Question 5

What is the significance of the 'date reported' vs. 'date of loss' gap in claim fraud analysis?

Accepted Answer

Unusual reporting delays, especially near policy cancellation, can signal backdating fraud

Answer

Reporting delays, particularly when a claim is filed just before policy cancellation or after a coverage lapse, are a recognized red flag for backdating fraud.

(ACE) ACORD Certified Expert Practice Test

(ACE) ACORD Certified Expert Practice Test

ACE Fraud Detection & Prevention 3