Amended bill would bring agents, brokers into fraud fight
Insurance agents and brokers would need training on insurance fraud to get a license in California and would be required to report suspected fraud, under a recently amended bill.
Amendments the Senate Insurance Committee made to S.B. 1242 would also modify requirements for insurance companies to report suspected fraud to the Department of Insurance.
Current law requires an insurer that “reasonably believes or knows that a fraudulent claim is being made” to report it within 60 days.
The amended bill would require an insurer that has determined, “after the completion of the insurer’s special investigative unit investigation, that it reasonably suspects or knows an act of insurance fraud occurred or might be occurring,” to submit a fraud report within 60 days.
At the same time, the bill would create a new requirement for agents and brokers to report suspected fraud.
Agents and brokers who suspect or know a fraudulent application is being made would be required to report their suspicions to the Department of Insurance within 60 days. Agents or brokers who suspect fraud is ongoing after a policy is placed would be required to report it to the insurer’s special investigative unit and cooperate with any subsequent investigation.
Agents and brokers would also be required to complete at least one hour of study on insurance fraud, starting March 1, 2023, as a condition of receiving or renewing a license.
S.B. 1242 is the Senate Insurance Committee’s omnibus bill and, as unanimously passed by the Senate in April, included several changes that were “non-controversial, technical or otherwise classified as code cleanup,” according to a bill analysis.
S.B. 1242 is currently awaiting a hearing by the Assembly Insurance Committee.
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