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Fraud Reporting
I.
Background
Under Texas Insurance Code Section 701.051, there is an affirmative duty for the Texas
Windstorm Insurance Association ("TWIA")/Texas Fair Plan Association ("TFPA"), as an
insurer engaged in the business of insurance in Texas, to report suspected insurance fraud
to the Texas Department of Insurance ("TDI"). In addition to reporting suspected fraud to
TDI, fraud may be reported to another authorized governmental agency, such as the
District Attorney. This duty is also applicable to employees, contractors, and members of
the board of directors of TWIA and TFPA.
TWIA/TFPA is committed to the reporting and thorough investigation of any alleged
insurance fraud. TWIA/TFPA will assist the TDI and other law enforcement agencies in the
prosecution of fraud in the criminal justice system and in TDI agency enforcement
proceedings.
II.
The Duty to Report Suspected Insurance Fraud
Under Section 701.051(a), there is a duty to report suspected insurance fraud not later
than the 30th day after the date:
1)
A determination is made that a fraudulent insurance act has been or
is about to be committed in this state; or
2)
There is a reasonable suspicion that a fraudulent insurance act
has been or is about to be committed in this state.
Under Texas Insurance Code Section 2210.012(d), a TWIA board member or TWIA
employee who reasonably suspects that a fraudulent insurance act has been or is about
to be committed by any TWIA board member or TWIA employee shall, not later than the
30th day after discovering the conduct, report the conduct and identity of the person
engaging in the conduct to the TDI and may report the conduct and the identity of the
person engaging in the conduct to another authorized governmental agency. The TDI shall
forward a report received under this subsection to the authorized governmental agency
in accordance with Chapter 701.
III.
Review and Reporting of Suspected Insurance Fraud
TWIA/TFPA is legally required to report fraud to TDI, but the statute does not prohibit or
limit TWIA/TFPA's authority to conduct an independent investigation of suspected
fraud. In fact, TWIA/TFPA may also report the information regarding fraud to federal,
state, and local law enforcement agencies or prosecuting attorneys. All suspected fraud
will be thoroughly investigated and documented by TWIA/TFPA Legal and Compliance.
Upon a determination or suspicion of fraud, an employee of TWIA/TFPA should
immediately report the information to the employee's Department Manager. In the event
the employee believes the Department Manager will or does not take any action
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regarding the report, the employee may report the information to
the General Manager, Compliance Manager, Vice President of Legal, or to TDI directly.
In addition, TWIA/TFPA maintains a whistle blower program which allows the reporting
of suspected fraud anonymously using Lighthouse Services. If any employee, officer,
director, or contractor believes at any time that he or she or any other person might be
engaged in suspected fraud, a person can report using the TWIA/TFPA whistle blower
program. Although we want to encourage the reporting of suspected fraud pursuant to
this policy, the whistle blower program does provide anonymity to those who wish to
report suspected fraud in this matter.
Within one business day, the Department Manager shall send written notice of the
suspected fraud and any other related activities or facts to the Compliance Manager,
senior management, or directly to an authorized governmental agency. The Compliance
Manager shall schedule a meeting with the reporting employee and Department Manager
to discuss an initial review of any evidence related to the suspected act of fraud.
TWIA and TFPA provide a fraud referral form to aid in reporting of any suspicion of fraud.
The Suspected Insurance Fraud Report form is attached to this policy and available to all
employees on the Employee Reference shared drive. Elements of a Comprehensive Fraud
Report are available to assist employees in completing the form.
The Compliance Manager has all authority necessary to reasonably investigate the
information provided by the employee including but not limited to:
1)
Reassignment of any TWIA/TFPA employee(s) to the Compliance
Manager for the purposes of investigating the suspected act of
fraud; and
2)
Communicating with TDI Fraud staff and/or appropriate federal,
state, or local law enforcement or other governmental agency
regarding information related to the suspected fraud.
The Compliance Manager shall coordinate a final review of the materials accumulated
related to the suspected act of fraud. If the Compliance Manager makes a determination
or reasonably suspects that a fraudulent act has been or is about to be committed in this
state, the Compliance Manager shall report the information in writing to the TDI insurance
fraud unit using the online form for insurance companies and special investigative units.
In addition, the Compliance Manager shall report any findings regarding the investigation
to the TWIA/TFPA General Manager and Counsel.
IV.
Immunity for Furnishing Information Related to Fraud
Under Section 701.052, Insurance Code, unless the act is done with malice, fraudulent
intent, or bad faith, a person is not liable in a civil action, including an action for libel or
slander, and a civil action may not be brought against the person, for furnishing
information relating to a suspected, anticipated, or completed fraudulent act if the
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information has been provided to the appropriate federal, state, or
local law enforcement or other government agency including the TDI.
In the event the suspected fraud involves a claim, the examiner must continue the
reasonable investigation of the claim after the initial referral to the Compliance Manager.
Reporting of suspected fraud does not affect any claim handling timelines outlined in
House Bill 3 (HB3) or Texas Insurance Code sections 541 and 542, unless the fraudulent
act is arson. It is imperative that an examiner continues the investigation and issues the
appropriate claims decision with the timeframes outlined in applicable statutes.
V.
TDI Contact Information
Texas Department of Insurance
Fraud Unit
P.O. Box 149336
Mail Code 109-3A
Austin, TX 78714-9336
Telephone: 512-463-6492
Fax: 512-490-1001
Insurance Fraud Toll-Free Hotline 1-888-327-8818
FraudRe[email protected]tate.tx.us
http://www.tdi.state.tx.us/fraud/onlinereport.ht
ml
VI.
Travis County District Attorney, Public Integrity Unit
The Travis County District Attorney, Public Integrity Unit has statewide jurisdiction on
the investigation and prosecution of certain insurance fraud. TWIA/TFPA may
concurrently file any suspected insurance fraud report at the same time as filing the
fraud report with the TDI.
Travis County District Attorney's Office - Contact Information
Mailing Address: P.O. Box 1748, Austin, TX 78767
Special Prosecution Division (Public Integrity Unit)
Telephone: (512) 854-9530 Fax: (512) 854-4810
http://www.traviscountyda.com
VII.
TWIA/TFPA Whistle Blower Program
Although the Whistle Blower Program was established to report improperly activity
observed by employees not related to fraud, TWIA/TFPA does not want to restrict the use
of the Whistle Blower Program in the event you wish to utilize it for the reporting of fraud
and/or remain anonymous. Please use the contact information below:
Phone: English (877) 472-2110
Spanish (800) 216-1288
PO Box 99090, Austin, TX 78709-9090 | Call 1-800-788-8247 | twia.org
Suspected Insurance Fraud Report
For Use by TWIA/TFPA Employees and Contractors
Instructions: Please use this form when submitting suspected insurance fraud on the part of any policyholder or third party claimant
for review by the Compliance Department. Please refer to the Operations Manual Fraud Reporting Procedures for additional
information.
Date of Report:
Company:
Your First Name:
Last Name:
Insured:
Policy No.:
Claim No.:
Date of Loss:
Location of Loss:
City, State:
Agent:
Agent’s Address:
City, State:
Fraud Scheme (check all that apply):
Adjuster Fraud
Agent Theft/Conversion
Agent Fraud
Altered Dec Page
Arson for Profit
Auto Burglary
Case Running
Catastrophe Fraud
Employee Fraud
Company Officer Fraud
False Claim Documents
False Statements
Inflated Claim
Mold Claim
Mortgage Fraud
Premium Fraud
Policy Application Fraud
Provider Billing Fraud
Public Adjuster Contract
Slip & Fall
Soft Tissue Injury
Staged Accident/Loss
Unknown
Unlicensed Agent
Unlicensed Company
Unlicensed Public Adjuster
Water Damage
Amount of Loss:
Subject of Suspected Fraud:
Policyholder Public Adjuster Attorney Agent Contractor Claimant Other
First Name:
Last Name:
Alias:
Phone Number:
Sex: Male Female Unknown
Address:
City/State/Zip:
Employer:
Occupation:
SS#/DL #:
Additional Info:
Brief Synopsis of the situation and the proof of the fraud, including any detailed information that will help identify the parties,
companies and transactions. Include dates when the fraudulent act occurred, when you discovered it or developed a reasonable
suspicion, when the claim was reported, etc. Please attach any supporting documentation to this form.
Employee Signature: Manager Signature: _
Amount Claimed:
Has Claim Been Paid: Yes No N/A
Current Reserve Amount:
Loss Amount Paid:
Expense Amount Paid:
Is investigation ongoing? Yes No
Have fraudulent benefits been paid? Yes No
If so, list amount?
Premium Amount:
Premium Amount Remitted:
