As used in this article, the following definitions shall apply:
(a) "Act" means any violation of California Code of Regulations, Title 10, Chapter 5, Section 2698.30-42, inclusive.(b) "Authorized governmental agency (agencies)" shall have the same meaning as used in the Insurance Frauds Prevention Act (IFPA).(c) "Claims handler" means every employee and agent of an insurer whose principal responsibilities include the investigation, adjustment, settlement, and resolution of claims.(d) "Commissioner" means the Insurance Commissioner of the State of California.(e) "Communication" includes the referral of suspected insurance fraud to the Department of Insurance and providing information and documents requested by the Fraud Division.(f) "Contracted entity" means any entity with which an insurer contracts to perform SIU or integral anti-fraud personnel duties or functions on behalf of the insurer. "Contracted entity" includes subcontractors and sub-subcontractors contracted to perform SIU or integral anti-fraud personnel duties or functions on behalf of the insurer. The term "contracted entity" does not include the insurer's affiliates, or subsidiaries, with which the insurer contracts to perform SIU or integral anti-fraud personnel duties or functions on behalf of the insurer. "Contracted entity" does not include entities with whom an insurer, or another of the insurer's contracted entities, contracts to provide an expert opinion on a medical, technical, or scientific topic, or perform a discreet, specific investigative task such as surveillance, accident reconstruction, background checks, scene inspections, social media checks, interviews, witness canvassing, Arising Out of Employment/Course of Employment (AOE/COE) investigations, activity checks, or database vendor services including, but not limited to, ISO ClaimSearch, LexisNexis, and Accurint, on behalf of the insurer in connection with the insurer's performance of its SIU or integral anti-fraud personnel duties or functions. However, the immediately preceding sentence notwithstanding, entities that (1) participate in the claims handling function of the insurer, (2) make decisions on behalf of the insurer with respect to the insurer's SIU or integral anti-fraud functions, or (3) contract with other entities to perform SIU or integral anti-fraud duties or functions on behalf of the insurer, are included within the meaning of the term "contracted entity."(g) "Department" means the California Department of Insurance.(h) "Fraud Division" means the California Department of Insurance Fraud Division formerly known as the Bureau of Fraudulent Claims.(i) "Hearing" means an adjudicative proceeding initiated by the Insurance Commissioner pursuant to the provisions of California Insurance Code section 1875.24(d).(j) "Inadvertent" means unintentional.(k) "Insurer" means every insurer admitted to do business in this state except the following: (3) Fraternal fire insurers.(4) Fraternal benefit societies.(5) Firemen, policemen, or peace officer benefit and relief associations.(6) Grant and annuity societies.(l) "Integral anti-fraud personnel" includes insurer personnel who the insurer has not identified as being directly assigned to its SIU but whose duties may include the processing, investigating, or litigation pertaining to payment or denial of a claim or application for adjudication of claim or application for insurance. These personnel may include claims handlers, underwriters, policy handlers, call center staff within the claims or policy function, legal staff, and other insurer employee classifications that perform similar duties.(m) "Reasonable belief" is a level of belief that an act of insurance fraud may have or might be occurring for which there is an objective justification based on articulable fact(s) and rational inferences therefrom.(n) "Red flag" or "red flag event" means facts, circumstances, or events which, singly or in combination, support(s) an inference that insurance fraud may have been committed, and includes patterns or trends that may indicate fraud, facts or circumstances present on a claim, and behavior or history of person(s) submitting a claim or application.(o) "Regulations" means these regulations, California Code of Regulations, Title 10, Chapter 5, Subchapter 9, Article 2.(p) "Special Investigative Unit" (SIU) means an insurer's unit or division that is established to investigate suspected insurance fraud. The SIU may be comprised of insurer employees or by contracting with other entities for the purpose of complying with applicable sections of the Insurance Frauds Prevention Act (IFPA) for the direct responsibility of performing the functions and activities as set forth in these regulations.(q) "Suspected insurance fraud" includes any misrepresentation of fact or omission of fact pertaining to a transaction of insurance including claims, premium, and application fraud. These facts may include evidence of doctoring, altering or destroying forms; prior history of the claimant, policy holder, applicant, or provider; receipts; estimates; explanations of benefits (EOBs), medical evaluations or billings; medical provider notes (commonly known as SOAPE notes: Subjective complaint, Objective findings, Assessment, Plan and Evaluation); Health Care Financing Administration (HCFA) forms; police and/or investigative reports; relevant discrepancies in written or oral statements and examinations under oath (EUO); unusual policy activity; and falsified or untruthful application for insurance. An identifiable pattern in a claim history may also suggest the possibility of suspected fraudulent claims activity. A claim may contain evidence of suspected insurance fraud regardless of the payment status.(r) "The Insurance Frauds Prevention Act" or "(IFPA)" shall refer to California Insurance Code sections 1871 through 1879.8.(s) "Willful" means a purpose or willingness to commit the act or make the omission referred to in the California Insurance Code or in these regulations. The Commissioner shall use the factors set forth at California Code of Regulations, Title 10, Section 2591.3(d)(1) (A-E) to determine whether or not an act is willful.Cal. Code Regs. Tit. 10, § 2698.30
1. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section filed 9-4-2003 as an emergency; operative 9-4-2003 (Register 2003, No. 36). A Certificate of Compliance must be transmitted to OAL by 1-2-2004 or emergency language will be repealed by operation of law on the following day.
2. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 1-2-2004 as an emergency; operative 1-3-2004. (Register 2004, No. 1). A Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency language will be repealed by operation of law on the following day.
3. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 5-4-2004 as an emergency; operative 5-4-2004 (Register 2004, No. 19). A Certificate of Compliance must be transmitted to OAL by 9-1-2004 or emergency language will be repealed by operation of law on the following day.
4. Editorial correction of HISTORY 3 (Register 2004, No. 36).
5. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 9-1-2004 as an emergency; operative 9-1-2004 (Register 2004, No. 36). A Certificate of Compliance must be transmitted to OAL by 12-30-2004 or emergency language will be repealed by operation of law on the following day.
6. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 12-28-2004 as an emergency; operative 12-30-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 4-29-2005 or emergency language will be repealed by operation of law on the following day.
7. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 4-29-2005 as an emergency; operative 4-29-2005 (Register 2005, No. 17). A Certificate of Compliance must be transmitted to OAL by 8-29-2005 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as 4-29-2005 order, including repealer and new section, transmitted to OAL 8-26-2005 and filed 10-7-2005 (Register 2005, No. 40).
9. Amendment of article heading, amendment of subsection (c), new subsection (f), subsection relettering and amendment of newly designated subsections (j), (l), (n) and (q)-(s) filed 7-30-2020; operative 10-1-2020 (Register 2020, No. 31). Note: Authority cited: Sections 1872.4, 1875.24, 1877.3, 1879.5 and 1879.6, Insurance Code; Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d. 805, 824, 258 Cal. Rptr. 161, 771 P.2d 1247; Credit Ins. Gen. Agents Assn. v. Payne (1976) 16 Cal.3d 651, 656, 128 Cal. Rptr. 881, 547 P.2d 993; and Garris v. Carpenter (1939) 33 Cal. App. 2d. 649, 653, 92 P.2d 688. Reference: Sections 1875.20, 1875.21, 1875.24, 1879.5, 9080, 10970, 11400, 11520, 11760, 11880, 12400.1, 12743, 12921(a) and 12926, Insurance Code.
1. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section filed 9-4-2003 as an emergency; operative 9-4-2003 (Register 2003, No. 36). A Certificate of Compliance must be transmitted to OAL by 1-2-2004 or emergency language will be repealed by operation of law on the following day.
2. Repealer of of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 1-2-2004 as an emergency; operative 1-3-2004. (Register 2004, No. 1). A Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency language will be repealed by operation of law on the following day.
3. Repealer of of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 5-4-2004 as an emergency; operative 5-4-2004 (Register 2004, No. 19). A Certificate of Compliance must be transmitted to OAL by 9-1-2004 or emergency language will be repealed by operation of law on the following day.
4. Editorial correction of History 3 (Register 2004, No. 36).
5. Repealer of of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 9-1-2004 as an emergency; operative 9-1-2004 (Register 2004, No. 36). A Certificate of Compliance must be transmitted to OAL by 12-30-2004 or emergency language will be repealed by operation of law on the following day.
6. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 12-28-2004 as an emergency; operative 12-30-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 4-29-2005 or emergency language will be repealed by operation of law on the following day.
7. Repealer of article 2 (sections 2698.40-2698.45), new article 2 (sections 2698.30-2698.42) and new section refiled 4-29-2005 as an emergency; operative 4-29-2005 (Register 2005, No. 17). A Certificate of Compliance must be transmitted to OAL by 8-29-2005 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as 4-29-2005 order, including repealer and new section, transmitted to OAL 8-26-2005 and filed 10-7-2005 (Register 2005, No. 40).
9. Amendment of article heading, amendment of subsection (c), new subsection (f), subsection relettering and amendment of newly designated subsections (j), (l), (n) and (q)-(s) filed 7-30-2020; operative 10/1/2020 (Register 2020, No. 31).