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

18 U.S.C. § 1033 prohibits persons convicted of felonies involving dishonesty or breach of trust from engaging in the insurance business without regulatory consent.

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 (fabricating a loss entirely) is treated as a serious felony, while soft fraud (exaggerating a real loss) may be treated as a misdemeanor or civil matter depending on the jurisdiction.

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

Satellite and drone imagery allows insurers to compare pre-loss property conditions against reported damage, exposing claims for losses that predate the reported event.

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

Claim padding involves exaggerating the length or severity of a real injury to collect indemnity benefits longer than medically warranted.

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 fraud reporting standards provide structured data formats that align with state Department of Insurance EDI mandates for suspicious activity reporting.

(ACE) ACORD Certified Expert Practice Test

(ACE) ACORD Certified Expert Practice Test

ACE Fraud Detection & Prevention 5