ACE Fraud Detection & Prevention 5

Question 1

Under the federal 18 U.S.C. § 1033, which activity is specifically prohibited for individuals convicted of a dishonest act?

Accepted Answer

Engaging in the business of insurance without written consent of a state insurance regulator

Answer

Purchasing any type of insurance policy

Answer

Filing insurance claims exceeding $10,000

Answer

Acting as a named insured on a commercial policy

Question 2

What distinguishes 'hard fraud' from 'soft fraud' in terms of criminal prosecution risk?

Accepted Answer

Hard fraud involves deliberate fabrication of a loss and carries felony charges; soft fraud is often treated as a civil matter

Answer

Hard fraud involves lower dollar amounts and is rarely prosecuted

Answer

Soft fraud is always prosecuted federally while hard fraud is handled by states

Answer

There is no legal distinction — both are treated identically under state law

Question 3

Which technology is increasingly used by insurers to detect fraudulent property damage claims by comparing pre- and post-loss aerial imagery?

Accepted Answer

Geospatial satellite and drone imagery analysis

Answer

Blockchain ledger verification

Answer

Voice stress analysis during recorded statements

Answer

Dark web monitoring for stolen policy data

Question 4

In workers' compensation fraud, what does 'claim padding' refer to?

Accepted Answer

Extending the duration of a legitimate claim beyond actual disability

Answer

Filing a claim for an injury that never occurred

Answer

Billing for medical services never rendered to the claimant

Answer

Establishing a shell company to generate false payroll

Question 5

Which ACORD standard facilitates the electronic reporting of suspicious activity from insurers to state fraud bureaus?

Accepted Answer

ACORD Fraud Reporting Standards aligned with state DOI EDI mandates

Answer

ACORD 25 (Certificate of Insurance)

Answer

ACORD 75 (Personal Umbrella Application)

Answer

ACORD 140 (Property Loss Notice)

Question 6

A physician bills for 30-minute office visits for workers' comp claimants, but surveillance shows visits lasting under 5 minutes. This best illustrates which fraud type?

Accepted Answer

Upcoding — billing for a higher level of service than provided

Answer

Unbundling — splitting a procedure into separately billed components

Answer

Ghost billing — billing for a patient who was never seen

Answer

Kickback fraud — paying claimants to use the provider

Question 7

What is the primary benefit of insurers participating in the Coalition Against Insurance Fraud (CAIF)?

Accepted Answer

Collaborative advocacy, research, and public awareness initiatives to reduce insurance fraud

Answer

Access to a shared database of all denied claims across the industry

Answer

Automatic SIU referrals to the FBI for all suspicious claims

Answer

Discounted reinsurance rates for members with low fraud loss ratios