The Pennsylvania Insurance Department recently issued a notice to advise and remind insurers of their obligations under the state’s law in the reporting of suspected arson and insurance fraud.
The department also said in its notice, “Arson and Insurance Fraud Reporting; Notice 2016-04,” that insurers that file reports of suspected arson or insurance fraud to the National Insurance Crime Bureau (NICB) can now submit them electronically. Previously, insurers could file reports to NICB only with hard copies.
Regulators said arson and insurance fraud are recognized in Pennsylvania as serious crimes.
Pennsylvania law explicitly requires insurer reporting of suspected arson (section 3(b)(1) of the Arson Reporting Immunity Act (40 P.S. § 1610.3(b)(1))) and suspected insurance fraud (75 Pa.C.S. § 1817 and 18 Pa.C.S. § 4117 (relating to reporting of insurance fraud; and insurance fraud)) to a law enforcement agency for consideration of criminal investigation and prosecution.
The department said the state’s law provides immunity to encourage and protect persons when they report suspected arson and insurance fraud. The department provided the following guidance to insurers seeking to meet their statutory obligation for reporting of suspected arson and insurance fraud:
- Each insurer has the burden of determining through investigation when the probable cause of a fire loss is arson or when a reasonable basis exists to believe that insurance fraud has occurred, is occurring or is to occur.
- Upon reaching a determination, insurers will — within 30 days — make a written report of the suspected arson or insurance fraud to a federal, state or local criminal law enforcement agency. Intead of making a written report, insurers are also authorized to file reports electronically directly to the NICB to satisfy their obligations under the law.
- An insurer’s entry of the suspected arson or suspected insurance fraud matter to a claims database or other information system serving the insurance industry will not, in and of itself, be viewed by the Insurance Department as satisfying that insurer’s statutory obligation to report suspected arson or insurance fraud to a criminal law enforcement agency.
- Examination of insurer fraud control programs will include a review of insurer determination of suspected arson and insurance fraud, and a confirmation of the insurer’s written reporting to a criminal law enforcement agency.
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