No. 43458 (5-year Review): Rule R590-248. Mandatory Fraud Reporting Rule

DAR File No.: 43458
Filed: 12/21/2018 02:33:06 PM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-201(3)(a) authorizes the Insurance Commissioner to write rules to implement the provisions of the Insurance Code, Title 31A. Section 31A-31-110 authorizes a rule to provide a process by which a person shall report a fraudulent insurance act.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

The Insurance Department has received no written comments regarding this rule during the past five years.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule must be continued because it establishes a process of reporting fraud for insurers who do business in Utah. Mandatory reporting of suspected fraud has been shown to be an effective anti-fraud tool. The Coalition Against Insurance Fraud promotes that mandatory reporting of suspected insurance fraud along with strong insurance civil immunity is the backbone between insurers and the state in the fight against insurance fraud. This rule provides the framework through which insurers report because it is required. Without this rule, insurers may choose to ignore fraud, pay claims, avoid possible bad faith lawsuits, and pass this cost onto consumers who already bear this burden. Largely the Insurance Department depends on this rule to receive referrals from insurers. Referrals are assigned for further investigation, which results in criminal prosecutions when warranted. This rule enables the Insurance Department to make sure insurers are looking for and reporting suspected fraud.

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Effective:

12/21/2018

Authorized by:

Steve Gooch, Information Specialist

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