Insurance Fraud Detection & Prevention Flashcards
7 cards from real Insurance 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 Detection & Prevention flashcards as text
Which of the following best describes 'soft fraud' in insurance?
Answer: Exaggerating a legitimate claim to receive a higher payout than deserved
Soft fraud involves embellishing or inflating a real claim, such as overstating the value of stolen items or exaggerating injuries from a real accident.
What is the primary purpose of the National Insurance Crime Bureau (NICB)?
Answer: To partner with insurers and law enforcement to combat insurance fraud and vehicle theft
The NICB is a nonprofit organization that works with insurance companies and law enforcement agencies to identify, detect, and prosecute insurance fraud and vehicle theft.
Insurance fraud is estimated to cost the US economy approximately how much annually?
Answer: More than $80 billion
According to the FBI and industry estimates, total insurance fraud costs the US economy more than $80 billion annually across all lines including health, auto, and property insurance.
Which of the following is a recognized red flag indicator of potential auto insurance fraud?
Answer: The accident occurs shortly after a new policy is issued or coverage is increased
A claim filed shortly after a policy is taken out or coverage is significantly increased is a classic red flag suggesting the policy may have been obtained in anticipation of a fraudulent claim.
What is a 'staged accident' in the context of auto insurance fraud?
Answer: A deliberately orchestrated collision intended to generate a fraudulent insurance claim
A staged accident is a planned collision where participants intentionally cause or fake a crash to file fraudulent auto insurance claims for injuries or property damage.
Which federal agency has primary jurisdiction over insurance fraud investigations at the federal level?
Answer: The Federal Bureau of Investigation (FBI)
The FBI has primary federal jurisdiction over insurance fraud investigations, particularly for schemes that cross state lines or involve federal programs.
Which behavior by a medical provider would most clearly constitute insurance fraud?
Answer: Billing for procedures or services that were never actually performed
Billing for services not rendered—known as phantom billing—is a clear form of healthcare insurance fraud, as the provider collects payment for care that was never delivered.