Florida Senate - 2017 COMMITTEE AMENDMENT
Bill No. SB 1012
Ì883346:Î883346
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
04/03/2017 .
.
.
.
—————————————————————————————————————————————————————————————————
—————————————————————————————————————————————————————————————————
The Committee on Banking and Insurance (Brandes) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Section 626.9891, Florida Statutes, is reordered
6 and amended to read:
7 626.9891 Insurer anti-fraud investigative units; reporting
8 requirements; penalties for noncompliance.—
9 (1)(5) As used in For purposes of this section, the term:
10 (a) “Anti-fraud investigative unit” means the designated
11 anti-fraud unit or division, or contractor authorized under
12 subparagraph (2)(a)2.
13 (b) “Designated anti-fraud unit or division” includes a
14 distinct unit or division or a unit or division made up of the
15 assignment of fraud investigation to employees whose principal
16 responsibilities are the investigation and disposition of claims
17 who are also assigned investigation of fraud. If an insurer
18 creates a distinct unit or division, hires additional employees,
19 or contracts with another entity to fulfill the requirements of
20 this section, the additional cost incurred must be included as
21 an administrative expense for ratemaking purposes.
22 (2)(1) By December 31, 2017, every insurer admitted to do
23 business in this state who in the previous calendar year, at any
24 time during that year, had $10 million or more in direct
25 premiums written shall:
26 (a)1. Establish and maintain a designated anti-fraud unit
27 or division within the company to investigate and report
28 possible fraudulent insurance acts claims by insureds or by
29 persons making claims for services or repairs against policies
30 held by insureds; or
31 2.(b) Contract with others to investigate and report
32 possible fraudulent insurance acts by insureds or by persons
33 making claims for services or repairs against policies held by
34 insureds.
35 (b) Adopt an anti-fraud plan.
36 (c) Designate at least one employee with primary
37 responsibility for implementing the requirements of this
38 section.
39 (d) Electronically An insurer subject to this subsection
40 shall file with the Division of Investigative and Forensic
41 Services of the department, and annually thereafter on or before
42 July 1, 1996, a detailed description of the designated anti
43 fraud unit or division established pursuant to paragraph (a) or
44 a copy of the contract executed under subparagraph (a)2., as
45 applicable, a copy of the anti-fraud plan, and the name of the
46 employee designated under paragraph (c) and related documents
47 required by paragraph (b).
48
49 An insurer must include the additional cost incurred in creating
50 a distinct unit or division, hiring additional employees, or
51 contracting with another entity to fulfill the requirements of
52 this section, as an administrative expense for ratemaking
53 purposes.
54 (2) Every insurer admitted to do business in this state,
55 which in the previous calendar year had less than $10 million in
56 direct premiums written, must adopt an anti-fraud plan and file
57 it with the Division of Investigative and Forensic Services of
58 the department on or before July 1, 1996. An insurer may, in
59 lieu of adopting and filing an anti-fraud plan, comply with the
60 provisions of subsection (1).
61 (3) Each insurers anti-fraud plan must plans shall include:
62 (a) An acknowledgement that the insurer has established
63 procedures for detecting and investigating possible fraudulent
64 insurance acts relating to the different types of insurance by
65 that insurer A description of the insurer’s procedures for
66 detecting and investigating possible fraudulent insurance acts;
67 (b) An acknowledgment that the insurer has established A
68 description of the insurer’s procedures for the mandatory
69 reporting of possible fraudulent insurance acts to the Division
70 of Investigative and Forensic Services of the department;
71 (c) An acknowledgement that the insurer provides the A
72 description of the insurer’s plan for anti-fraud education and
73 training required by this section to the anti-fraud
74 investigative unit of its claims adjusters or other personnel;
75 and
76 (d) A description of the required anti-fraud education and
77 training;
78 (e) A written description or chart outlining the
79 organizational arrangement of the insurer’s anti-fraud
80 investigative unit, including the position titles and
81 descriptions of staffing; and personnel who are responsible for
82 the investigation and reporting of possible fraudulent insurance
83 acts
84 (f) The rationale for the level of staffing and resources
85 being provided for the anti-fraud investigative unit which may
86 include objective criteria, such as the number of policies
87 written, the number of claims received on an annual basis, the
88 volume of suspected fraudulent claims detected on an annual
89 basis, an assessment of the optimal caseload that one
90 investigator can handle on an annual basis, and other factors.
91 (4) By December 31, 2018, each insurer shall provide staff
92 of the anti-fraud investigative unit at least 2 hours of initial
93 anti-fraud training that is designed to assist in identifying
94 and evaluating instances of suspected fraudulent insurance acts
95 in underwriting or claims activities. Annually thereafter, an
96 insurer shall provide such employees a 1-hour course that
97 addresses detection, referral, investigation, and reporting of
98 possible fraudulent insurance acts for the types of insurance
99 lines written by the insurer.
100 (5) Each insurer is required to report data related to
101 fraud for each line of insurance written by the insurer during
102 the prior calendar year. The data shall be reported to the
103 department by March 1, 2019, and annually thereafter, and must
104 include, at a minimum:
105 (a) The number of policies in effect;
106 (b) The amount of premiums written for policies;
107 (c) The number of claims received;
108 (d) The number of claims referred to the anti-fraud
109 investigative unit;
110 (e) The number of other insurance fraud matters referred to
111 the anti-fraud investigative unit that were not claim related;
112 (f) The number of claims investigated or accepted by the
113 anti-fraud investigative unit;
114 (g) The number of other insurance fraud matters
115 investigated or accepted by the anti-fraud investigative unit
116 that were not claim related;
117 (h) The number of cases referred to the Division of
118 Investigative and Forensic Services;
119 (i) The number of cases referred to other law enforcement
120 agencies;
121 (j) The number of cases referred to other entities; and
122 (k) The estimated dollar amount or range of damages on
123 cases referred to the Division of Investigative and Forensic
124 Services or other agencies.
125 (6) In addition to providing information required under
126 subsections (2), (4), and (5), each insurer writing workers’
127 compensation insurance shall also report the following
128 information to the department, on or before March 1, 2019, and
129 annually thereafter August 1 of each year, on its experience in
130 implementing and maintaining an anti-fraud investigative unit or
131 an anti-fraud plan. The report must include, at a minimum:
132 (a) The estimated dollar amount of losses attributable to
133 workers’ compensation fraud delineated by the type of fraud,
134 including claimant, employer, provider, agent, or other type.
135 (b) The estimated dollar amount of recoveries attributable
136 to workers’ compensation fraud delineated by the type of fraud,
137 including claimant, employer, provider, agent, or other type.
138 (c) The number of cases referred to the Division of
139 Investigative and Forensic Services, delineated by the type of
140 fraud, including claimant, employer, provider, agent, or other
141 type.
142 (a) The dollar amount of recoveries and losses attributable
143 to workers’ compensation fraud delineated by the type of fraud:
144 claimant, employer, provider, agent, or other.
145 (b) The number of referrals to the Bureau of Workers’
146 Compensation Fraud for the prior year.
147 (c) A description of the organization of the anti-fraud
148 investigative unit, if applicable, including the position titles
149 and descriptions of staffing.
150 (d) The rationale for the level of staffing and resources
151 being provided for the anti-fraud investigative unit, which may
152 include objective criteria such as number of policies written,
153 number of claims received on an annual basis, volume of
154 suspected fraudulent claims currently being detected, other
155 factors, and an assessment of optimal caseload that can be
156 handled by an investigator on an annual basis.
157 (e) The inservice education and training provided to
158 underwriting and claims personnel to assist in identifying and
159 evaluating instances of suspected fraudulent activity in
160 underwriting or claims activities.
161 (f) A description of a public awareness program focused on
162 the costs and frequency of insurance fraud and methods by which
163 the public can prevent it.
164 (7)(4) An Any insurer who obtains a certificate of
165 authority has 6 after July 1, 1995, shall have 18 months in
166 which to comply with subsection (2), and one calendar year
167 thereafter, to comply with subsections (4), (5), and (6) the
168 requirements of this section.
169 (8)(7) If an insurer fails to timely submit a final
170 acceptable anti-fraud plan or anti-fraud investigative unit
171 description, fails to implement the provisions of a plan or an
172 anti-fraud investigative unit description, or otherwise refuses
173 to comply with the provisions of this section, the department,
174 office, or commission may:
175 (a) Impose an administrative fine of not more than $2,000
176 per day for such failure by an insurer to submit an acceptable
177 anti-fraud plan or anti-fraud investigative unit description,
178 until the department, office, or commission deems the insurer to
179 be in compliance;
180 (b) Impose an administrative fine for failure by an insurer
181 to implement or follow the provisions of an anti-fraud plan or
182 anti-fraud investigative unit description; or
183 (c) Impose the provisions of both paragraphs (a) and (b).
184 (9)(8) The department may adopt rules to administer this
185 section.
186 Section 2. Section 626.9896, Florida Statutes, is created
187 to read:
188 626.9896 Insurance Fraud Dedicated Prosecutor Program.—
189 (1) LEGISLATIVE INTENT.—The Legislature recognizes the
190 increasing problem of insurance fraud, the need to adequately
191 investigate and prosecute insurance fraud, and the need to
192 create a program dedicated to the prosecution of insurance
193 fraud. The Legislature recognizes that the Division of
194 Investigative and Forensic Services of the department can
195 efficiently and effectively implement and monitor such a
196 program, and can direct and reallocate resources as insurance
197 fraud trends change and demand for prosecutorial resources shift
198 between judicial circuits.
199 (2) ESTABLISHMENT OF THE INSURANCE FRAUD DEDICATED
200 PROSECUTOR PROGRAM.—There is created within the department a
201 grant program to fund the Insurance Fraud Dedicated Prosecutor
202 Program. The purpose of the program is to provide grants to
203 state attorneys’ offices to fund attorney and paralegal
204 positions that are dedicated exclusively to the prosecution of
205 insurance fraud. The program shall consist only of funds
206 appropriated by the state specifically for this program.
207 (3) GRANT APPLICATIONS.—Beginning in 2018, a state
208 attorney’s office seeking grant funds must submit an application
209 to the Division of Investigative and Forensic Services detailing
210 the proposed number of dedicated prosecutors and paralegals
211 requested for the prosecution of insurance fraud. Applications
212 must be received by July 1 of each even-numbered year and shall
213 identify funding needs for 2 years. Grant awards are contingent
214 upon legislative appropriation in the Insurance Regulatory Trust
215 Fund and Workers’ Compensation Administration Trust Fund and
216 subject to renewal by the department. The division must compile
217 and review the timely submitted applications to establish its
218 legislative budget request for the program for the upcoming two
219 years.
220 (4) AWARD OF GRANTS.—The division is authorized to award
221 grants to state attorneys’ offices using a formula adopted by
222 rule of the department and based on metrics and data compiled by
223 the division which allocate funds to the judicial circuits based
224 on trends in insurance fraud and the performance and output
225 measures reported as required by this section. A grant awarded
226 to a state attorney’s office may only be used to fund attorney
227 and paralegal positions that are dedicated exclusively to the
228 prosecution of insurance fraud. Grants are subject to the
229 provisions of s. 215.971. The division shall establish the
230 annual maximum grant amount, based on funds appropriated to the
231 department for funding the Insurance Fraud Dedicated Prosecutor
232 Program.
233 (5) REPORTING.—The division must track and report on the
234 effectiveness and efficiency of each state attorney’s office’s
235 use of the awarded grant funds. To help complete the report,
236 each state attorney’s office that is awarded a grant under this
237 section must submit performance and output information as
238 determined by the division. The report must be provided to the
239 Executive Office of the Governor, the Speaker of the House of
240 Representatives, and the President of the Senate by September 1,
241 2020, and annually thereafter. The report must include, but is
242 not limited to, the following:
243 (a) The amount of grant funds received and expended by each
244 state attorney’s office;
245 (b) A description of the purposes for which the funds were
246 expended, including payment of salaries, expenses, and any other
247 costs needed to support the delivery of services;
248 (c) The results achieved from the expenditures made,
249 including the number of complaints filed, the number of
250 investigations initiated, the number of arrests made, the number
251 of convictions, and the amount of restitution or fines paid as a
252 result of the cases presented for prosecution.
253 (6) RULES.—The department may adopt rules pursuant to ss.
254 120.536(1) and 120.54 for the administration and implementation
255 of the Insurance Fraud Dedicated Prosecutor Program. Such rules
256 may establish procedures for the Insurance Fraud Dedicated
257 Prosecutor Program, including forms to be used by the state
258 attorney’s offices. The department may establish a formula for
259 allocating grant funds, eligibility criteria, renewal
260 requirements, and standards for evaluating the effectiveness and
261 efficiency of expended funds.
262 Section 3. Section 641.3915, Florida Statutes, is amended
263 to read:
264 641.3915 Health maintenance organization anti-fraud plans
265 and investigative units.—Each authorized health maintenance
266 organization and applicant for a certificate of authority shall
267 comply with the provisions of ss. 626.989 and 626.9891 as though
268 such organization or applicant were an authorized insurer. For
269 purposes of this section, the reference to the year 1996 in s.
270 626.9891 means the year 2000 and the reference to the year 1995
271 means the year 1999.
272 Section 4. This act shall take effect September 1, 2017.
273
274 ================= T I T L E A M E N D M E N T ================
275 And the title is amended as follows:
276 Delete everything before the enacting clause
277 and insert:
278 A bill to be entitled
279 An act relating to insurer anti-fraud efforts;
280 reordering and amending s. 626.9891, F.S.; defining
281 and revising definitions; requiring every insurer to
282 designate at least one primary anti-fraud employee for
283 certain purposes; requiring insurers to adopt an anti
284 fraud plan; revising insurer requirements in providing
285 anti-fraud information to the Department of Financial
286 Services; requiring specified information to be filed
287 annually with the department; revising the information
288 to be provided by insurers who write workers’
289 compensation insurance; requiring each insurer to
290 provide annual anti-fraud education and training;
291 requiring insurers who submit an application for a
292 certificate of authority after a specified date to
293 comply with the section; providing penalties for
294 failure to comply with requirements of the section;
295 creating s. 626.9896, F.S.; providing legislative
296 intent; creating a grant program to fund the Insurance
297 Fraud Dedicated Prosecutor Program within the
298 department; requiring moneys that are appropriated for
299 the program be used to fund specific attorney and
300 paralegal positions; specifying procedures to be used
301 by state attorneys’ offices when applying for biennial
302 grants; specifying that grants are for two years but
303 authorizing the division to renew the grants;
304 specifying procedures to be used by the department in
305 awarding grant funds; requiring the Division of
306 Investigative and Forensic Services to provide an
307 annual report to the Executive Office of the Governor,
308 the Speaker of the House of Representatives, and the
309 Senate President; specifying information to be
310 contained in the report; authorizing the department to
311 adopt rules to administer and implement the insurance
312 fraud dedicated prosecutor program; amending s.
313 641.3915, F.S.; deleting obsolete provisions;
314 providing an effective date.