Insurance Fraud Investigation Flashcards
7 cards from real CFS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Fraud Investigation flashcards as text
A claimant submitting a disability claim under a long-term disability policy is videotaped performing heavy construction work. During the recorded statement, the investigator should:
Answer: Ask open-ended questions about daily activities without revealing the video
Investigators should use open-ended questions to obtain the claimant's own account of their limitations before disclosing contradictory evidence.
Which element is NOT required to prove civil insurance fraud in most U.S. jurisdictions?
Answer: Physical harm to the insurer
Civil fraud requires a false statement, knowledge of falsity, intent to deceive, reliance, and damages—but physical harm is not a required element.
In life insurance fraud, the term 'churning' refers to:
Answer: Replacing existing policies to generate new commissions
Churning involves an agent inducing clients to replace policies unnecessarily to earn new commissions, harming the policyholder.
A catastrophe event triggers hundreds of roof damage claims in a single zip code. Which fraud scheme is MOST likely to emerge in this scenario?
Answer: Storm chaser contractor fraud
After catastrophes, unlicensed contractors known as 'storm chasers' solicit homeowners, submit inflated or false damage claims, and often disappear with insurance proceeds.
An investigator reviewing a life insurance application discovers the insured's medical history was misrepresented. The insured died within the contestability period. The insurer's BEST course of action is:
Answer: Rescind the policy and deny the claim based on material misrepresentation
Material misrepresentation on an application allows the insurer to rescind the policy during the contestability period, typically two years.
Which database tool is used by U.S. life and health insurers to detect whether a deceased claimant had other life insurance policies in force?
Answer: MIB Group database
MIB Group (formerly Medical Information Bureau) maintains an industry database of underwriting information, including prior life and health applications.
An insured presents 40 receipts totaling $18,000 for personal property claimed stolen, but many items appear to be purchased after the reported theft date. This BEST supports a charge of:
Answer: Claim padding through fabricated documentation
Submitting fabricated or backdated receipts to inflate a personal property claim constitutes claim padding through fraudulent documentation.