No. 31903 (New Rule): R590-248. Mandatory Fraud Reporting Rule

DAR File No.: 31903
Filed: 08/28/2008, 12:02
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purposes of this rule are to describe the required elements in a mandatory fraud report and establish a reporting process for insurance fraud reports.

Summary of the rule or change:

This rule describes the elements in the mandatory fraud report and establishes a reporting process.

State statutory or constitutional authorization for this rule:

Sections 31Al-2-201 and 31A-31-110

Anticipated cost or savings to:

the state budget:

This rule will not result in additional income or expense to the state or the Insurance Department. Insurers are required by Utah law to report suspected fraud. This rule merely establishes the required information to be reported and to whom the report should be submitted. As a result of this rule, there will be no fiscal impact on the state or department's budget.

local governments:

This rule will have no effect on local governments since it deals with the relationship between the department and its licensees.

small businesses and persons other than businesses:

This rule does not affect small business. They are not required to report.

Compliance costs for affected persons:

It is expected that insurers doing business in Utah will be able to prepare this report easily and with their current staff. The report is comprised of four simple questions. Consumers should feel no impact from this rule in regard to their benefits or premiums.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will have no fiscal impact on businesses. D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division 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:

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

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2008

This rule may become effective on:

10/22/2008

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance Administration.

R590-248. Mandatory Fraud Reporting Rule.

R590-248-1. Authority.

This rule is promulgated pursuant to Section 31A-2-201(3)(a), which authorizes rules to implement the Insurance Code and 31A-31-110, which authorizes a rule to provide a process by which a person shall report a fraudulent insurance act.

 

R590-248-2. Purpose and Scope.

(1) The purposes of this rule are to:

(a) describe the required elements in a mandatory fraud report; and

(b) establish a reporting process for fraud reports.

(2) This rule applies to:

(a) all insurers doing the business of insurance in Utah; and

(b) all auditors employed by a title insurer doing the business of title insurance in Utah.

 

R590-248-3. Mandatory Elements of a Fraud Report.

A mandatory fraud report shall:

(1) be in writing;

(2) provide information in detail relating to:

(a) the fraudulent insurance act; and

(b) the perpetrator of the fraudulent insurance act; and

(3) state whether the person submitting the report of a fraudulent insurance act also reported the fraudulent insurance act in writing to:

(a) the attorney general;

(b) a state law enforcement agency;

(c) a criminal investigative department or agency of the United States;

(d) a district attorney; or

(e) the prosecuting attorney of a municipality or county; and

(4) state the agency to which the person reported the fraudulent insurance act.

 

R590-248-4. Mandatory Fraud Reporting Process.

(1) The following persons shall report a fraudulent insurance act to the commissioner if theperson has a good faith belief on the basis of a preponderance of the evidence that a fraudulent insurance act is being, will be, or has been committed by:

(a) a person other than the person making the report:

(b) an insurer; or

(c) an auditor that is employed by a title insurer.

(2) An auditor employed by a title insurer shall report a fraudulent act to the title insurer and the title insurer shall report the fraudulent act in accordance with this subsection.

(3) An insurer shallsubmit mandatory fraud reports electronically.

(4) An insurer shall report a fraudulent insurance act by:

(a) submitting a report to the commissioner using the National Insurance Crime Bureau (NICB) fraud reporting system; or

(b) submitting a report directly to the commissioner using email sent to [e-mail].

 

R590-248-5. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R590-248-6. Enforcement Date.

The commissioner will begin enforcing this rule 45 days from the rule's effective date.

 

R590-248-7. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, such invalidity may not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: insurance, mandatory fraud reporting

Date of Enactment or Last Substantive Amendment: 2008

Authorizing, Implemented, or Interpreted Law: 31Al-2-201; 31A-31-110