ACFE Insurance Fraud

Question 1

An insured person deliberately sets fire to their own failing business to collect on a property policy. This is commonly called:

Accepted Answer

Arson for profit

Answer

Arson for profit is intentionally destroying insured property to collect the insurance proceeds, often when the business is financially distressed.

Question 2

An insurance agent collects premiums from customers but never forwards them to the insurer, pocketing the funds. This is known as:

Accepted Answer

Premium diversion

Answer

Premium diversion occurs when an agent or broker keeps customer premium payments rather than remitting them to the insurance company, leaving customers uncovered.

Question 3

Staged accident rings typically involve which combination of participants?

Accepted Answer

Fake victims, corrupt medical providers and sometimes attorneys

Answer

Staged accident schemes use participants who pose as victims, with complicit clinics and lawyers inflating injuries and claims.

Question 4

Which is a common red flag of claimant fraud on a property theft claim?

Accepted Answer

Claimed items are unusually expensive and receipts are unavailable

Answer

High-value losses with no documentation, especially soon after a policy purchase or increase, are classic indicators of an inflated or fabricated claim.

Question 5

'Churning' in life insurance refers to:

Accepted Answer

An agent inducing a policyholder to replace policies repeatedly to earn new commissions

Answer

Churning is replacing existing policies with new ones primarily to generate commissions, often to the policyholder's detriment.

(ACFE) Association of Certified Fraud Examiners Practice Test

(ACFE) Association of Certified Fraud Examiners Practice Test

ACFE Insurance Fraud