This article was reprinted from:

PMA Insurance Group
Winter 2009 Directions
PDF versions of Directions at:
http://www.pmagroup.com/directions.htm
 

The PMA Special Investigations Unit (SIU)
Fighting Fraud to Protect Your Assets

As a crucial part of The PMAr Companies, The PMA Special Investigations Unit (SIU) is devoted to detecting insurance fraud and protecting clients' assets. The PMA SIU is a team of fraud specialists who operate behind the scenes to investigate referred claims, identify fraud and cooperate with the appropriate authorities to prosecute offenders.

Though fraud is not ubiquitous, its presence in the commercial insurance industry is not overlooked. As reported by the Coalition Against Insurance Fraud, a national anti-fraud insurance watchdog, more than two of five property-casualty insurers have increased spending to fight fraud over the past three years and more than four of five insurers have formal anti-fraud programs (Insurance Research Council-Insurance Services Office, 2002). Additionally, a 2003 survey conducted by consulting firm Accenture, Ltd. found that nearly one in four Americans says it's okay to defraud insurers.

That's why the PMA SIU is so vital for PMA's overall service to you--it helps protect your assets against insurance fraud. While its name may conjure up images of black clad clandestine investigators and scenes from the latest episode of CSI, the PMA SIU operates quietly and efficiently with its eye on the validity of claims. The SIU team generally investigates claims referred by PMA claims adjusters who suspect fraud or have received tips from clients who suspect it. While most claims are legitimate and do not warrant a full investigation by the SIU, some raise red flags that require the team to take action.

Here's a typical path that a suspicious claim might follow:

• Referral to SIU based on suspicions or inconsistencies uncovered by claims professional.

• SIU review of claim and preliminary investigation, which may include ISO ClaimSearch (a comprehensive, online, all-claims database and system for claims processing and fraud detection), and contacting other carriers and involved parties to research the claim.

• Surveillance of claimant, if warranted, to ascertain validity of the alleged injury.

• Evaluation of all investigative information, including surveillance, to determine next step.

• Referral to relevant state fraud bureau and/or National Insurance Crime Bureau (NICB) when warranted or required by statute.

• Relevant state or local authority's investigation of referral to verify information provided by PMA and determine if the claimant violated a fraud statute.

• Relevant state or local authority's determination to pursue the claim criminally or close the referral.

• If criminal pursuit is warranted, the relevant state or local authority and PMA SIU collaborate to build the case, support an indictment and secure restitution for involved clients.

"We don't readily assume people are going to cheat the system," says Chris Sloan, PMA Corporate SIU Coordinator. "We do, however, know it happens and we keep abreast of the latest industry trends in order to uncover fraud in time to protect our clients and their assets from undue claims and their associated costs."

The PMA SIU Difference

A 2003 survey conducted by consulting firm Accenture, Ltd. found that nearly one in four Americans says it's okay to defraud insurers.

A resource to all PMA® Companies, the PMA SIU is officially charged with executing PMA's Anti-Fraud Plan-a corporate-wide mandate aimed at reducing fraud to protect the assets of clients and PMA. The Unit investigates referred claims, maintains PMA's statutory and regulatory anti-fraud compliance, contracts private investigators and serves as a liaison to law enforcement and the NICB. The SIU actively participates in insurance industry professional organizations and routinely works with other insurance carriers to identify and thwart fraud. Here are two examples:

Truck Driver

A road construction company - a PMA workers' compensation client - received a tip that one of its employees was driving another company's tractor trailer for cash while awaiting resolution of a pending workers' compensation claim. After the client contacted PMA claims, the SIU reviewed the claim, assigned surveillance, caught the claimant operating a tractor trailer and referred the file to the State Office of the Attorney General - Insurance Fraud Section. PMA's SIU and defense counsel worked with the Attorney General's staff during a seven-month criminal investigation after which the claimant was charged with two felony counts and one misdemeanor count of workers' compensation fraud. A subsequent plea bargain agreement saved the company an untold sum of medical and other claim-related expenses.

Maintenance Worker

A maintenance worker, employed by an apartment complex insured by PMA, reported being assaulted in the parking lot when responding to an emergency maintenance call. Police and EMTs arrived at the scene and the maintenance worker required surgery to repair a broken nose and bones. A PMA claims professional took a recorded statement from the claimant, investigated the reported emergency maintenance issue, and reviewed copies of the police and emergency room reports. While working with the client to resolve inconsistencies, the PMA claims professional learned that emergency medical personnel had described the maintenance worker as having been "heavily intoxicated" and having admitted to being attacked by a relative. After uncovering that the initial emergency maintenance call was a hoax, the PMA claims professional denied the claim and referred it to PMA's SIU. After substantiating the suspicion of fraud, SIU contacted local law enforcement and referred the claim to the NICB. The SIU's decisive action prevented the fraudulent claim along with the long-term and extensive medical bills associated with it.