N.J. Admin. Code § 11:16-6.4

Current through Register Vol. 56, No. 9, May 6, 2024

Section 11:16-6.4 - Special Investigations Unit (SIU)-duties, qualifications, and composition

(a) Except for automobile insurers that insure fewer than 2,500 New Jersey automobile policies, and health insurers that insure fewer than 10,000 lives, the plan filed in accordance with 11:16-6.3 shall establish a full-time Special Investigations Unit ("SIU").

(b) The SIU shall be responsible for the following:

1. Conducting investigations of claims referred by the claim personnel or applications referred by underwriting personnel whenever the adjuster, processor, or underwriter identifies specific facts and circumstances which, upon further SIU investigation, may lead to a reasonable conclusion that a violation of 17:33A-4 has occurred;

2. Providing liaison with OIFP, other law enforcement personnel and the MCEAFC;

3. Providing in-service training to claims personnel, underwriting personnel, and adjusters in accordance with the provisions of 11:16-6.5;

4. Maintaining a database of fraudulent claims and application fraud which shall contain, at a minimum, the names, addresses and other identifying information regarding all parties to the investigation referred to in (b)1 above;

5. Informing insurance underwriters of ineligible risks by reason of prior fraudulent activities from the database in (b)4 above;

6. Identifying persons and organizations that are involved in suspicious claim activity and application fraud, as described in (b)1 above;

7. Referring matters to OIFP in accordance with 11:16-6.6(b) and 6.7 and providing notice of suspicious claims in accordance with N.J.A.C. 11:6-6.6(c); and

8. Ensuring that all evidence on matters referred to the SIU including, but not limited to, checks issued in payment of claims, taped statements, original receipts, and original documents submitted by a person or entity in support of or in opposition to a claim applicant, are identified, collected and preserved in order to be turned over to OIFP at the request of OIFP in connection with the referral of cases to OIFP.

(c) The SIU shall have the following composition:

1. SIU investigators and SIU specialists shall be a separate unit from the claims or underwriting unit. For purposes of this paragraph, it shall not violate this provision if the SIU issues a check paying a claim or denies payment of a claim so long as:

i. The SIU personnel are a separate and distinct unit; and

ii. When closing the file at the completion of the investigation, the SIU records its findings in writing together with its recommendation to pay or deny the claim with the reasons.

2. Automobile insurers shall employ at least one SIU investigator or SIU specialist (when permitted by 11:16-6.4(d)2 ) for each 30,000 New Jersey automobile policies serviced.

3. Health insurers offering comprehensive benefits contracts shall employ at least one SIU investigator or SIU specialist (when permitted by 11:16-6.4(d)2 ) for every 60,000 insured lives.

4. Health insurers offering limited benefits contracts shall employ at least one SIU investigator or SIU specialist (when permitted by 11:16-6.4(d)2 ) for every 250,000 insured lives. Limited benefits contracts shall include, but not be limited to, the following: accident only; credit; disability; long-term care; Medicare supplement; dental only; vision only; insurance issued as a supplement to liability insurance; and any other supplemental hospital indemnity benefits.

(d) Qualifications of SIU investigators and specialists shall be as follows:

1. SIU investigators shall have at least one of the following:

i. A Bachelor's degree;

ii. An Associate's degree plus a minimum of two years experience with insurance related employment;

iii. A minimum of four years of experience with insurance related employment; or

iv. A minimum of five years of law enforcement experience.

2. When approved by the Department in the plan, an insurer shall be permitted to employ a limited number of SIU specialists who shall possess unique qualifications by way of training, technical skill, and/or experience to investigate and identify cases of fraud, but lack the specific educational requirements set forth in (d)1 above, to be SIU investigators.

(e) The plan may provide that the functions of the SIU may be assigned to an outside vendor or third party administrator. In such case, the plan shall provide that the outside vendor or third party administrator shall also be responsible, together with the insurer, for compliance with N.J.A.C. 11:16-6.

N.J. Admin. Code § 11:16-6.4

Amended by R.2005 d.159, effective 5/16/2005.
See: 37 New Jersey Register 199(a), 37 New Jersey Register 1733(a).
In (b), substituted "MCEAFC" for "DAFC" in 2.