ACE Fraud Detection & Prevention 4

Question 1

Which data analytics technique is most effective for identifying organized fraud rings across multiple policyholders?

Accepted Answer

Social network analysis mapping relationships between claimants, providers, and attorneys

Answer

Univariate regression on claim amounts

Answer

Simple frequency counts of claim types by ZIP code

Answer

Manual review of individual claim files by adjusters

Question 2

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?

Accepted Answer

When the disclosure is for healthcare fraud and abuse detection purposes

Answer

Never — all medical data sharing requires written patient consent

Answer

Only after obtaining a court order

Answer

Only with Medicare and Medicaid programs

Question 3

What is the primary purpose of a 'fraud score' generated at the point of first notice of loss (FNOL)?

Accepted Answer

To prioritize claims for SIU referral based on risk indicators

Answer

To determine the settlement value of the claim

Answer

To automatically deny high-scoring claims

Answer

To calculate the insurer's loss reserves

Question 4

Which ACORD form is used to report commercial general liability claims, and which field is most critical for fraud detection?

Accepted Answer

ACORD 5 — witness information

Answer

ACORD 3 — prior policy number

Answer

ACORD 4 — description of operations

Answer

ACORD 101 — additional remarks

Question 5

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?

Accepted Answer

Collision repair fraud — using template estimates without actually inspecting vehicles

Answer

Premium fraud by the shop owner

Answer

Arson — the vehicles were deliberately damaged

Answer

Ghost policy fraud

Question 6

In the context of the ACORD Data Standards, what does the 'prior carrier' field on an application help underwriters detect?

Accepted Answer

Gaps in coverage that may indicate unreported losses or policy cancellations for nonpayment/fraud

Answer

Whether the applicant qualifies for a loyalty discount

Answer

The applicant's credit score tier

Answer

The geographic risk territory for rating purposes

Question 7

Which best describes the 'fraud triangle' theory as applied to insurance fraud prevention?

Accepted Answer

Three conditions enabling fraud: opportunity, pressure/motive, and rationalization

Answer

Three types of insurance fraud: hard, soft, and premium

Answer

Three investigative steps: detect, investigate, and prosecute

Answer

Three regulatory bodies: NAIC, FBI, and state DOI