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Policy Void From Its Inception – No Duty to Defend The implied covenant of good faith and fair dealing applies equally on the person insured as it applies to an insurer. When a person applies for insurance and misrepresents material facts the covenant is breached and the insurer has the right to seek a court order that the policy is rescinded from its inception and that any duty to defend on the policy does not…
“Arson for Profit: How an Attempt to use Arson & Fraud to Fund Terrorism Failed” This story is based on a real case involving a member of Russian/Armenian organized crime, real insurers, investigators, lawyers, fire fighters, and insurance brokers. The names, descriptions, and identities of the people involved have been changed to protect both the guilty and the innocent. The report to the US Senate, after this case was decided by the California Courts, reveal…
More on the Discretion of the Prosecutor urts are loathe to interfere with prosecutors’ judgments. The criminal defendant tries to challenge a prosecutor’s (or an entire prosecutor’s office) participation in an insurance fraud prosecution. The standard for prosecutorial disqualification is understandably very high. Efforts to disqualify prosecutors should not be allowed to interfere with the broad discretion afforded to prosecutors in the criminal process. The following video was adapted from my book, “Insurance Claims A…
The Certified Fraud Examiner The Certified Fraud Examiner (CFE) is a fraud-fighting professional. The Association of Certified Fraud Examiners is an international, 25,000-member professional organization dedicated to fighting fraud and white-collar crime. It was established in 1988, and is based in Austin, Texas. With offices in North America and chapters around the globe, the Association is networked to respond to the needs of anti-fraud professionals everywhere. The following video was adapted from my book, “Insurance…
  E-Books Available From Barry Zalma Random Thoughts on Insurance – Vol. IV Since 2010 I have been writing a blog post at least five days a week. This e-book is a collection of those posts that reveal my interest in insurance case law from 2014 to 2016. Some of the cases reviewed were important. Some were of first impression. Others will be totally unimportant. All were interesting to me and I hope are interesting…
More on Fraud Divisions Fraud division results across the US are improving. Insurance fraud is estimated to take over $100 billion every year from the insurance buying public. There are now 47 dedicated insurance fraud bureaus or divisions. The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library http://www.zalma.com/videoblog/wp-content/uploads/2016/07/MOREFRAUDDIVISIION.mp4 Legal Disclaimer The author and publisher disclaim any…
Fraud Divisions In 47 states, the insurance industry pays money into a special fund, creating a fraud division within the state department of insurance. The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library http://www.zalma.com/videoblog/wp-content/uploads/2016/07/FRAUDDIVISIONS.mp4 Legal Disclaimer The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use…
The Special Investigation Unit SIUs help identify and investigate suspicious claims, although some insurance companies outsource this work to other insurers and investigative agencies. An SIU may be a small team whose primary role is to train claim representatives to deal with the more routine kinds of fraud cases or may consist of teams of trained investigators, including former law enforcement officers, attorneys, accountants, and claim experts who work together to investigate fraudulent activities thoroughly.…
Quantifying Anti-Fraud Efforts One problem with the fight against insurance fraud is that its success is hard to quantify. There is no way to say precisely how much a business has saved when a fraudulent claim is not paid since the business or insurer owed nothing in the first place. Did the business save $80 when it did not pay a fraudulent claim for broken glasses? An adjuster might estimate that by stopping the single…
 Anti-Fraud Programs Anti-fraud statutes and regulations enacted in the various states now require that insurers institute anti-fraud programs. Good business sense should have dictated the existence of such anti-fraud programs from the date the first insurance policy was issued, but insurers have always been caught in the Catch-22 obligation to deal with each insured with the utmost good faith. Insurers, not wanting to be accused of acts of bad faith, have always preferred to pay…