Nebraska Department of Insurance
|
NEBRASKA DEPARTMENT OF INSURANCEINSURANCE FRAUD PREVENTION DIVISION 941 O Street, Suite 400 Lincoln, NE 68508-3639 |
Changes Effective July 20, 2002
§44-6601
INSURANCE
ARTICLE 66
INSURANCE FRAUD
Section.
44-6601.
Act, how cited.
44-6602.
Purpose of act.
44-6603.
Terms, defined.
44-6604.
Fraudulent insurance acts; enumerated.
44-6605.
Immunity from civil liability.
44-6606.
Insurance Fraud Prevention Division; powers and duties; public inspection,
limitations; fee.
44-6607.
Civil penalty; costs; section, how construed.
44-6608.
Act, how construed.
44-6601. Act, how cited. Sections 44-6601 to 44-6608 shall be known and may be cited as the Insurance Fraud Act.
Source: Laws 1995, LB 385, § 1.
44-6602. Purpose of act. The purpose of the Insurance Fraud Act is to confront the problem of insurance fraud in Nebraska by facilitating the detection of insurance fraud, eliminating the occurrence of insurance fraud through the development of fraud prevention programs, authorizing imposition of civil penalties, authorizing restitution of fraudulently obtained insurance benefits, and reducing the amount of premium dollars used to pay fraudulent claims.
Source: Laws 1995, LB 385, § 2.
44-6603.
Terms, defined. For purposes of the Insurance Fraud Act:
(1) Department
means the Department of Insurance;
(2) Director
means the Director of Insurance;
(3) Insurer
means any person or entity transacting insurance as defined in section
44-102 with or without a certificate of authority issued by the director.
Insurer also means health maintenance organizations, legal service insurance
corporations, prepaid limited health service organizations, dental and
other similar health service plans, and entities licensed pursuant to the
Intergovernmental Risk Management Act and the Comprehensive Health Insurance
Pool Act. Insurer also means an employer who is approved by the Nebraska
Workers' Compensation Court as a self-insurer; and
(4) Statement
includes, but is not limited to, any notice, statement, proof of loss,
bill of lading, receipt for payment, invoice, account, estimate of property
damages, bill for services, diagnosis, prescription hospital or medical
records, X-rays, test result, or other evidence of loss, injury, or expense,
whether oral, written, or computer-generated.
Source: Laws 1995, LB 385, § 3; Laws 1997, LB 272, § 2; Laws 2002, LB 547, § 2. Effective date July 20, 2002.
Cross References
Comprehensive Health Insurance
Pool Act, see section 44-4201.
Intergovernmental Risk
Management Act, see section 44-4301.
44-6604.
Fraudulent insurance acts; enumerated. For purposes of the Insurance
Fraud Act, a person or entity commits a fraudulent insurance act if he
or she:
(1) Knowingly
and with intent to defraud or deceive presents, causes to be presented,
or prepares with knowledge or belief that it will be presented to or by
an insurer, or any agent of an insurer, any statement as part of, in support
of, or in denial of a claim for payment or other benefit from an insurer
or pursuant to an insurance policy knowing that the statement contains
any false, incomplete, or misleading information concerning any fact or
thing material to a claim;
(2) Assists,
abets, solicits, or conspires with another to prepare or make any statement
that is intended to be presented to or by an insurer or person in connection
with or in support of any claim for payment or other benefit from an insurer
or pursuant to an insurance policy knowing that the statement contains
any false, incomplete, or misleading information concerning any fact or
thing material to the claim;
(3) Makes
any false or fraudulent representations as to the death or disability of
a policy or certificate holder or a covered person in any statement or
certificate for the purpose of fraudulently obtaining money or benefit
from an insurer;
(4) Knowingly
and willfully transacts any contract, agreement, or instrument which violates
this section;
(5) Receives
money for the purpose of purchasing insurance and converts the money to
the person's own benefit;
(6) Willfully
embezzles, abstracts, purloins, misappropriates, or converts money, funds,
premiums, credits, or other property of an insurer or person engaged in
the business of insurance;
(7) Knowingly
and with intent to defraud or deceive issues or possesses fake or counterfeit
insurance policies, certificates of insurance, insurance identification
cards, or insurance binders;
(8) Knowingly
and with intent to defraud or deceive makes any false entry of a material
fact in or pertaining to any document or statement filed with or required
by the department; or
(9) Knowingly
and with intent to defraud or deceive removes, conceals, alters, diverts,
or destroys assets or records of an insurer or person engaged in the business
of insurance or attempts to remove, conceal, alter, divert, or destroy
assets or records of an insurer or person engaged in the business of insurance.
Source: Laws 1995, LB 385, § 4; Laws 1997, LB 272, § 3; Laws 2002, LB 547, § 3. Effective date July 20, 2002.
44-6605.
Immunity from civil liability. (1) Any person or entity, including
the department, an insurer, or a person employed by or authorized by an
insurer whose activities include the investigation of or reporting of suspected
insurance fraud, acting without malice, fraudulent intent, or bad faith
shall be immune from civil liability for furnishing any information relating
to suspected fraudulent insurance acts to:
(a) The
director or his or her agents or employees;
(b) Law
enforcement officials or their agents or employees;
(c) The
Nebraska Workers' Compensation Court or its agents or employees;
(d) Persons
or entities subject to Chapter 44 or their agents or employees; or
(e) The
National Association of Insurance Commissioners or any organization established
to detect and prevent fraudulent insurance acts or its agents, employees,
or designees.
(2) This
section does not abrogate or modify in any way any common-law or statutory
privilege or immunity.
Source: Laws 1995, LB 385, § 5; Laws 1997, LB 272, § 4.
44-6606.
Insurance Fraud Prevention Division; powers and duties; public inspection;
limitations; fee. (1) In order to investigate
activities involving insurance fraud,
the director shall appoint a sufficient staff to
be known as the Insurance Fraud Prevention Division.
(2)(a)
As specified by the director, division investigators who are certified
law enforcement officers of the State of Nebraska shall be vested with
the authority and power of a peace officer to carry out the laws of this
state administered by the director. The general laws of this state
applicable to peace officers shall be applicable to such investigators.
Such investigators shall be empowered, among other powers, to search and
arrest with or without a warrant, file and serve any lien, seize property,
serve and return a summons, warrant, or subpoena issued by a court of law
or the director, and bring an offender before any court with jurisdiction
in this state, except that such investigators shall not be authorized
to enforce any laws other than laws administered by the director.
(b) Subdivision
(a) of this subsection shall not be construed to restrict any other law
enforcement officer of this state from enforcing any state law, insurance
or otherwise.
(3) The
division shall:
(a)
Initiate independent inquiries and conduct independent investigations when
the division has cause to believe that an act of insurance fraud has been
or is currently being committed;
(b) Review
reports or complaints of alleged insurance fraud to determine
whether such reports require further investigation and to conduct
such investigation;
(c)
Conduct independent examinations of alleged fraudulent insurance acts and
undertake independent studies to determine the extent of fraudulent insurance
acts; and
(d)
Cooperate with federal, state, and local law enforcement, prosecuting attorneys,
and the Attorney General in the investigation and prosecution of insurance
fraud violations. At the request of the division, through the director,
the Attorney General shall prosecute fraudulent insurance acts through
criminal or civil proceedings as authorized by the Insurance Fraud Act
if, after investigation, the Attorney General is convinced that there is
sufficient legal merit to justify the proceeding. The Attorney
General, after consultation with the director, may refer cases of
fraudulent insurance acts to a special assistant attorney general or county
attorney for prosecution. Any costs directly associated with the
prosecution and attorney's fees for any special assistant attorney general
shall be paid by the division.
(4)(a)
The director or his or her designee may: Administer oaths and affirmations;
subpoena witnesses; compel attendance of witnesses; take evidence; and
require the production of any books, papers, correspondence, memoranda,
agreements, documents, records, and other tangible things which constitute
or contain evidence that is deemed relevant or material to an investigation
or enforcement of the Insurance Fraud Act, when it shall appear that such
action is necessary and proper. The attendance of witnesses and the
production of records shall be required from any place within the State
of Nebraska. Witnesses summoned by the director or by his or her
designee shall be paid the same fees that are paid witnesses in the courts
of the State of Nebraska and mileage at the rate provided in section 81-1176.
(b) A
subpoena of the director or of his or her designee may be served by any
person designated in the subpoena to serve it. Service upon a natural
person may be made by certified mail or personal delivery of the subpoena
to him or her. Service may be made upon a domestic or foreign insurer,
corporation, or partnership, upon a domestic or foreign limited liability
company, or upon any other unincorporated association which is subject
to suit under a common name, or any other entity by delivering the subpoena
to an officer, a managing or general agent, a member, or any other agent
authorized by appointment or by law to receive service of process.
The affidavit of the person serving the subpoena entered on a true copy
thereof by the person serving it shall be proof of service.
(c) If
any person refuses to obey a subpoena issued by the director or by his
or her designee, the director or his or her designee may invoke the aid
of any court of the State of Nebraska within the jurisdiction of which
the investigation is carried on or of which the subpoenaed person is an
inhabitant, carries on business, or may otherwise be found, to compel compliance
with such subpoena.
(d) The
court may issue an order requiring the subpoenaed person to appear before
the director or his or her designee to produce records, if so ordered,
or to give testimony concerning the matter under investigation.
Nothing in this section shall be construed to suspend or otherwise interfere
with the operation of the Free Flow of Information Act.
(e) Any
failure to obey the order of the court may be punished by the court as
contempt. All process in any such case may be served in the judicial
district in which the subpoenaed person is an inhabitant, carries on business,
or may otherwise be
found.
(5) If
the division seeks evidence, documentation, or related materials located
outside this state pertinent to an investigation or examination, it may
designate representatives or deputies, including officials of the
state where the matter is located, to secure and inspect the evidence,
documentation, or materials on its behalf.
(6) The
papers, documents, reports, and evidence of the department regarding the
subject of an investigation of insurance fraud shall not be subject to
public inspection for so long as the director deems reasonably necessary
to complete the investigation or to protect the person investigated from
unwarranted injury or so long as the director deems it to be in the public
interest. Such papers, documents, reports, and evidence regarding
the subject of an investigation of insurance fraud shall not be subject
to subpoena until they are opened for public inspection by the department,
unless the director consents, or until after notice to the department and
a hearing, the court determines the department would not be
unnecessarily hindered by such subpoena. Department investigators
shall not be subject to subpoena in civil actions by any court of this
state to testify concerning any matter of which they have knowledge regarding
a pending insurance fraud investigation by the department.
(7) (a)
the director may provide the papers, documents, reports, and evidence described
in subsection (6) of this section to other state, federal, foreign, and
international regulatory and law enforcement agencies and the National
Association of Insurance Commissioners and its affiliates and subsidiaries
if the recipient agrees in writing to maintain the confidentiality of the
information.
(b) The
director may receive papers, documents, reports, and evidence described
in subsection (6) of this section from other state, federal, foreign, or
international regulatory and law enforcement agencies and from the National
Association of Insurance Commissioners and its affiliates and subsidiaries.
The director shall maintain as confidential or privileged information received
pursuant to this subdivision if received with notice or the understanding
that it is confidential or privileged under the laws of the jurisdiction
that is the source of the information. Such information shall not
be a public record subject to disclosure by the director pursuant
to sections 84-712 to 84-712.09, subject to subpoena, subject to discovery,
or admissible in evidence in any private civil action, except that the
director may use such information in any regulatory or legal action brought
by the director. The director, and any other person while acting
under the authority of the director who has received information pursuant
to this subdivision, may not, and shall not be required to, testify in
any private civil action concerning any information subject to this section.
Nothing in this section shall constitute a waiver of any applicable privilege
or claim of confidentiality in the information received pursuant
to this subdivision as a result of information sharing authorized by this
section.
(8)(a)
On or before March 1 each year, each insurer as defined in section 44-103
holding a certificate of authority to transact the business of insurance
in this state shall pay a fee as established by the director not to exceed
two hundred dollars to the director to be remitted to the State Treasurer
for credit to the Department of Insurance Cash Fund, which fees may be
appropriated only to carry out the purposes of the Insurance Fraud Act.
Assessment associations and unincorporated mutual associations shall
not be subject to this subsection.
(b) On
or before March 1 each year, each employer who is approved by the Nebraska
Workers' Compensation Court as a self-insurer shall pay a fee as established
by the director not to exceed one thousand dollars to the Nebraska Workers'
Compensation Court to be remitted to the State Treasurer for credit to
the Department of Insurance Cash Fund, which fees may be appropriated only
to carry out the purposes of the Insurance Fraud Act. Willful refusal
by any such self-insurer to pay the fee required under this subdivision
shall be grounds for the compensation court to suspend or revoke the approval
of such self-insurer to provide self-insurance coverage of workers' compensation
liability pursuant to section 48-145.
Source: Laws 1994, LB 1074, § 15; R.S.Supp.,1994, § 44-112.01; Laws 1995, LB 385, § 6; Laws 1996, LB 969, § 9; Laws 1997, LB 272, § 5; Laws 2001, LB 52, § 56; Laws 2002, LB 547, § 4. Effective date July 20, 2002.
Cross Reference Free Flow of Information Act, see section 20-147.
44-6607.
Civil penalty; costs; section, how construed.
(1) A person or entity who is found by a court of competent jurisdiction,
pursuant to an action initiated by the Director of Insurance, to have committed
a fraudulent insurance act set forth in section 44-6604 is subject to a
civil penalty not to exceed five thousand dollars for the first violation,
ten thousand dollars for the second violation, and fifteen thousand dollars
for each subsequent violation. An action under this section shall
be in lieu of a prosecution under section 28-631.
(2) Costs
and expenses incurred in any investigation or other action arising out
of a violation under the Insurance Fraud Act may be sought in any judgment,
court decree, or other final result. Any recovered costs, except
civil or criminal penalties, shall be deposited by the director in the
fund from which the costs were expended. The court may make such
additional orders or judgments as may be necessary to restore to any person
in interest any compensation which may have been acquired by means of any
act prohibited in section 44-6604.
(3) This
section shall not be construed to prohibit the direct and the alleged violator
from entering into a written agreement upon commencement of a civil action
in which the alleged violator does not admit or deny the charges but consents
to payment of the civil penalty. A consent agreement may not be used
in a subsequent civil or criminal proceeding relating to any violation
of the act.
Source: Laws 1995, LB 385, § 7.
44-6608.
Act, how construed. The Insurance Fraud Act does not:
(1) Preempt
the authority or relieve the duty of any other law enforcement agency to
investigate, examine, and prosecute suspected violation of law;
(2) Prevent
or prohibit a person from voluntarily disclosing any information concerning
insurance fraud to any law enforcement agency;
(3) Limit
any of the powers granted elsewhere by the laws of this state to the Director
of Insurance or the Department of Insurance to investigate and examine
possible violations of law and to take appropriate action; or
(4) Limit
any of the powers granted elsewhere by the laws of this state to the Nebraska
Workers' Compensation Court to investigate and examine possible violations
of law and to take appropriate action.
Source: Laws 1995, LB 385, § 8.