California Anti-Fraud Regulations

Being compliant in CA takes experience, expertise, attention to detail, and just a little bit of crazy.

California Anti-Fraud Regulations  

Section 2698.30 (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.

Section 2698.39 - Anti Fraud Training:
(a) The insurer shall establish and maintain an ongoing anti-fraud training program, planned and conducted to develop and improve the anti-fraud awareness skills of the integral anti-fraud personnel.
(b) The insurer shall designate an SIU staff person to be responsible for coordinating the ongoing anti-fraud training program.
(c) The anti-fraud training program shall consist of three levels:
  1. All newly- hired employees
  2. Integral anti-fraud personnel
  3. The SIU personnel

*Update 10/2020 - 2698.39 (c)(3)The SIU personnel shall receive at least five (5) hours of continuing anti-fraud training per calendar year. The training shall include; instruction in one or more of the following topics:
  1. Investigative techniques;
  2. Communication with the Fraud Division and authorized governmental agencies;
  3. Fraud indicators;
  4. Emerging fraud trends; or
  5. Legal and related issues

*Update 10/2020 - 2698.39 (d)
The training requirements stated in subdivision (c) of this Section 2698.39 shall not apply to persons retained to provide an expert opinion on a medical, technical, or scientific topic on behalf of the insurer and who do not participate in the claims handling or decision making function of the insurer.

*Update 10/2020 - 2698.39 (e)
Training, instruction, or courses that may be used in order to satisfy the requirement stated in subdivision (c)(3) of this section shall include, without limitation: anti-fraud conferences; SIU round-tables hosted by the Fraud Division; anti-fraud association meetings and training; and insurer in-house training.

Section 2698.42 Penalties
(a) If the Commissioner acts pursuant to the provisions of California Insurance Code Section 1875.24( c) or (d) and finds that the insurer has failed to comply with the provisions of this article, the Commissioner shall impose a monetary penalty in an amount not to exceed $5,000 for each act of non-compliance. Where the Commissioner determines that an insurer has willfully failed to comply with this article, the Commissioner may impose a monetary penalty in an amount not to exceed $ 10,000 for each willful act of non -compliance.

On June 19, 2020, the California Department of Insurance (CDI) finalized their updates to the DOI Special Investigative Units (SIU) regulations regarding fraud compliance and SIU's in particular. Some of the key changes are contracted responsibilities, the investigation of suspected fraud, the referral of suspected fraud, and enhanced annual SIU training requirements.

The DOI is conducting 10x as many audits as before meaning new regulations are more dense, stringent, and increase the odds of being fined for failure to comply. Audits performed by the CA Departments of insurance can be up to $10,000 per finding.

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Click the Download button below to download Dalene Bartholomew 's Whitepaper published in August 2020 regarding new DOI regulations and how to lessen your regulatory burden. 
To learn more about VRC's Fraud Regulatory Compliance services, use the Download button to obtain a copy of the VRC Fraud Compliance & CEU Training PDF. 
If you are looking for a copy of the Agent/Broker Training Certificate, you can download the PDF with the link below.

Revised SIU Regulations Presentation, Effective Date October 1, 2020

Please review the California DOI video (approx. 30 min.) outlining the SIU Requirements for insurers by clicking the laptop on the right to go to the video. 

Review the complete CA SIU Anti Fraud Regulations by clicking the button below.

SB 1242 Webinar Recording - 1/11/23

Please click the laptop on the right to review the SB 1242 Agent and Broker Anti-Fraud Awareness Training. 

Review the complete SB 1242 CA Agents & Brokers Compliance Mandate by clicking the button below. 

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Please use the Download button below to download and fill out the CA DOI Certificate as proof that you watched the video. 
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CA DOI Website-SIU Compliance

T: +800-654-2185
E: ceu@vrcinvestigations.com
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