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
What is 'hard fraud' in insurance?
Answer: Deliberately planning and executing a false claim or loss event to collect insurance proceeds
Hard fraud involves deliberately planning and committing a fraudulent act, such as intentionally burning a home or staging a theft, specifically to collect insurance money.
What is the 'swoop and squat' technique in auto insurance fraud?
Answer: A staged rear-end collision caused by one vehicle cutting in front of another and braking suddenly
In a swoop and squat scheme, one vehicle pulls in front of another and brakes suddenly, then occupants file fraudulent injury claims against the innocent rear driver's insurer.
What is 'claim padding' in insurance fraud?
Answer: Inflating the value or extent of a genuine loss beyond what actually occurred
Claim padding involves inflating a real loss—such as listing additional stolen items that were not taken—to receive a larger settlement than actual damages warrant.
What is the primary role of a Special Investigative Unit (SIU) within an insurance company?
Answer: A department dedicated to identifying and investigating potentially fraudulent claims
Special Investigative Units are dedicated teams within insurance companies tasked with identifying, investigating, and referring potentially fraudulent claims to law enforcement.
Which of the following is NOT typically considered a red flag for workers' compensation fraud?
Answer: The treating physician is selected from the insurer's approved provider network
Using a physician from the insurer's approved network is standard compliant practice, not a fraud indicator; the other options all suggest potential fabrication or exaggeration of a claim.
What is 'premium fraud' in the context of insurance?
Answer: Providing false information on an application to obtain lower premiums or undeserved coverage
Premium fraud occurs when an applicant misrepresents information—such as understating mileage or hiding prior accidents—to obtain a lower premium or coverage they would not otherwise qualify for.
Which database do multiple US insurers use to share claims history and detect patterns of fraudulent activity across companies?
Answer: CLUE (Comprehensive Loss Underwriting Exchange)
CLUE is a claims history database maintained by LexisNexis that insurers use to share auto and property claim records, helping identify claimants with suspicious patterns across multiple companies.