Insurance Insurance Fraud Detection & Prevention 2

Question 1

What is 'hard fraud' in insurance?

Accepted Answer

Deliberately planning and executing a false claim or loss event to collect insurance proceeds

Answer

Fraud that is especially difficult to detect due to complex documentation

Answer

Fraud committed by licensed insurance professionals rather than policyholders

Answer

Overcharging premiums based on inaccurate risk classifications

Question 2

What is the 'swoop and squat' technique in auto insurance fraud?

Accepted Answer

A staged rear-end collision caused by one vehicle cutting in front of another and braking suddenly

Answer

A scheme where a fraudster impersonates an insurer and collects premiums

Answer

A method of inflating repair costs by substituting cheaper parts

Answer

A technique where claimants exaggerate soft-tissue injuries after minor fender-benders

Question 3

What is 'claim padding' in insurance fraud?

Accepted Answer

Inflating the value or extent of a genuine loss beyond what actually occurred

Answer

Adding non-existent claimants to a legitimate insurance policy

Answer

Filing duplicate claims with multiple insurers for the same loss

Answer

Forging signatures on insurance claim documents

Question 4

What is the primary role of a Special Investigative Unit (SIU) within an insurance company?

Accepted Answer

A department dedicated to identifying and investigating potentially fraudulent claims

Answer

A team that sets premium rates based on actuarial data

Answer

A unit that handles regulatory compliance and agent licensing

Answer

A group responsible for underwriting high-risk policies

Question 5

Which of the following is NOT typically considered a red flag for workers' compensation fraud?

Accepted Answer

The treating physician is selected from the insurer's approved provider network

Answer

An injury reported on a Monday morning with no witnesses

Answer

A claimant observed performing physical activities inconsistent with the claimed injury

Answer

An employee filing a claim within the first week of employment

Question 6

What is 'premium fraud' in the context of insurance?

Accepted Answer

Providing false information on an application to obtain lower premiums or undeserved coverage

Answer

Charging policyholders more than the filed rate for their coverage

Answer

Failing to pay premiums on time while maintaining active coverage

Answer

Switching policies frequently to avoid rate increases after claims

Question 7

Which database do multiple US insurers use to share claims history and detect patterns of fraudulent activity across companies?

Accepted Answer

CLUE (Comprehensive Loss Underwriting Exchange)

Answer

NCCI (National Council on Compensation Insurance) database

Answer

ISO (Insurance Services Office) risk registry

Answer

FEMA flood zone mapping database