CU Fraud Identification and Mitigation 2

Question 1

Which red flag is most commonly associated with premium diversion fraud in insurance?

Accepted Answer

Agent remitting partial premiums while retaining the difference

Answer

Policyholder requesting coverage increases mid-term

Answer

Insurer delaying claim payments beyond 30 days

Answer

Broker submitting applications without signatures

Question 2

A property underwriter notices that a commercial applicant's loss history shows three total-loss fires in five years at different locations. This pattern is most indicative of:

Accepted Answer

Arson-for-profit fraud

Answer

Adverse selection

Answer

Moral hazard accumulation

Answer

Catastrophic exposure clustering

Question 3

The SIU (Special Investigations Unit) is primarily responsible for:

Accepted Answer

Investigating claims with indicators of potential fraud

Answer

Setting reserve amounts for suspected fraudulent claims

Answer

Prosecuting individuals who commit insurance fraud

Answer

Auditing underwriting files for compliance errors

Question 4

An applicant for disability income insurance who overstates their income to obtain a higher benefit limit is committing which type of fraud?

Accepted Answer

Application fraud

Answer

Claims fraud

Answer

Rate evasion

Answer

Phantom income fraud

Question 5

Which analytical technique involves comparing a claimant's current loss patterns against a statistical model of expected losses to detect anomalies?

Accepted Answer

Predictive modeling

Answer

Subrogation analysis

Answer

Loss development triangulation

Answer

Actuarial credibility weighting

Question 6

A contractor submits inflated repair estimates after a hailstorm, and the insured knowingly signs off on the exaggerated amounts. This scenario best describes:

Accepted Answer

Organized fraud ring involving both parties

Answer

Soft fraud by the contractor only

Answer

Hard fraud by the insured only

Answer

A legitimate dispute over repair costs

Question 7

Under the Insurance Fraud Prevention Model Act, insurers are generally required to:

Accepted Answer

Maintain an anti-fraud plan and report fraud to authorities

Answer

Deny all claims where fraud is suspected without investigation

Answer

Charge higher premiums to all policyholders in high-fraud zip codes

Answer

Obtain signed fraud attestations from every claimant