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CA Code and Ethics
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Introduction
1. Basic insurance concepts and principles
2. The insurance marketplace
3. Required fraud training — CDI
3.1 Introduction and learning objectives
3.2 Fraud Division
3.3 Fraud Division programs
3.3.1 Key program areas
3.3.2 Types of fraud cases
3.3.3 Tracking fraud cases
3.3.4 Insurer responsibilities
3.3.5 Special Investigation Unit (SIU) requirements
3.4 Fraud detection
Wrapping up
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3.3.1 Key program areas
CA Code and Ethics
3. Required fraud training — CDI
3.3. Fraud Division programs
Our California Insurance Code and Ethics course is currently in development and is a work-in-progress.

Key program areas

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Key program areas:

Workers’ compensation fraud

  • Covers claimant fraud (employees faking or exaggerating injuries), employer fraud (underreporting payroll to reduce premiums), and provider fraud (medical providers billing for unnecessary or nonexistent treatment).
  • Examples: A worker files a claim for an injury that actually happened while playing sports; an employer misclassifies employees to lower premiums.

Automobile insurance fraud

  • Includes staged collisions, false injury claims, inflated repair bills, and vehicle “give-ups” (intentionally abandoning or destroying a car and reporting it as stolen).
  • This type of fraud is widespread and contributes significantly to rising auto insurance premiums in California.

Healthcare fraud

  • Involves fraudulent billing by medical professionals, prescription fraud, and false claims for medical services not provided.
  • Examples: A clinic bills for unnecessary tests; individuals stage fake medical treatments to collect benefits.

Property and casualty fraud

  • Encompasses fraud related to homeowners’, renters’, and commercial property policies.
  • Examples: Filing inflated theft claims, committing arson for profit, or fabricating damage after a natural disaster.

Premium fraud

  • Occurs when an employer or individual intentionally misrepresents facts to obtain lower insurance premiums.
  • Examples: Misclassifying workers into less hazardous job categories or underreporting payroll to reduce workers’ comp costs.

Life and disability fraud

  • Includes false applications, staged deaths, or other misrepresentations used to obtain benefits under life or disability policies.
  • Examples: Providing false medical history on an application, or submitting disability claims for conditions that don’t prevent employment.

Each of these fraud programs is funded through assessments on insurers. The programs support investigations, provide training, and coordinate with prosecutors across California. The CDI Fraud Division directs resources toward the most harmful fraud types to help protect consumers from higher premiums and insurers from financial losses.

Workers’ compensation fraud

  • Claimant, employer, and provider fraud types
  • Common schemes: faked/exaggerated injuries, underreported payroll, false medical billing

Automobile insurance fraud

  • Staged accidents, false injury claims, inflated repairs, vehicle “give-ups”
  • Major driver of rising auto premiums in California

Healthcare fraud

  • Fraudulent billing, prescription fraud, false medical service claims
  • Examples: unnecessary tests, staged treatments

Property and casualty fraud

  • Fraud in homeowners’, renters’, and commercial property insurance
  • Includes inflated theft claims, arson for profit, fabricated disaster damage

Premium fraud

  • Misrepresentation to lower insurance premiums
  • Tactics: misclassifying workers, underreporting payroll

Life and disability fraud

  • False applications, staged deaths, misrepresentations for benefits
  • Examples: fake medical history, unjustified disability claims

Program funding and operations

  • Funded by insurer assessments
  • Supports investigations, training, and prosecution coordination
  • Focuses resources on most damaging fraud types to protect consumers and insurers

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Key program areas

Key program areas:

Workers’ compensation fraud

  • Covers claimant fraud (employees faking or exaggerating injuries), employer fraud (underreporting payroll to reduce premiums), and provider fraud (medical providers billing for unnecessary or nonexistent treatment).
  • Examples: A worker files a claim for an injury that actually happened while playing sports; an employer misclassifies employees to lower premiums.

Automobile insurance fraud

  • Includes staged collisions, false injury claims, inflated repair bills, and vehicle “give-ups” (intentionally abandoning or destroying a car and reporting it as stolen).
  • This type of fraud is widespread and contributes significantly to rising auto insurance premiums in California.

Healthcare fraud

  • Involves fraudulent billing by medical professionals, prescription fraud, and false claims for medical services not provided.
  • Examples: A clinic bills for unnecessary tests; individuals stage fake medical treatments to collect benefits.

Property and casualty fraud

  • Encompasses fraud related to homeowners’, renters’, and commercial property policies.
  • Examples: Filing inflated theft claims, committing arson for profit, or fabricating damage after a natural disaster.

Premium fraud

  • Occurs when an employer or individual intentionally misrepresents facts to obtain lower insurance premiums.
  • Examples: Misclassifying workers into less hazardous job categories or underreporting payroll to reduce workers’ comp costs.

Life and disability fraud

  • Includes false applications, staged deaths, or other misrepresentations used to obtain benefits under life or disability policies.
  • Examples: Providing false medical history on an application, or submitting disability claims for conditions that don’t prevent employment.

Each of these fraud programs is funded through assessments on insurers. The programs support investigations, provide training, and coordinate with prosecutors across California. The CDI Fraud Division directs resources toward the most harmful fraud types to help protect consumers from higher premiums and insurers from financial losses.

Key points

Workers’ compensation fraud

  • Claimant, employer, and provider fraud types
  • Common schemes: faked/exaggerated injuries, underreported payroll, false medical billing

Automobile insurance fraud

  • Staged accidents, false injury claims, inflated repairs, vehicle “give-ups”
  • Major driver of rising auto premiums in California

Healthcare fraud

  • Fraudulent billing, prescription fraud, false medical service claims
  • Examples: unnecessary tests, staged treatments

Property and casualty fraud

  • Fraud in homeowners’, renters’, and commercial property insurance
  • Includes inflated theft claims, arson for profit, fabricated disaster damage

Premium fraud

  • Misrepresentation to lower insurance premiums
  • Tactics: misclassifying workers, underreporting payroll

Life and disability fraud

  • False applications, staged deaths, misrepresentations for benefits
  • Examples: fake medical history, unjustified disability claims

Program funding and operations

  • Funded by insurer assessments
  • Supports investigations, training, and prosecution coordination
  • Focuses resources on most damaging fraud types to protect consumers and insurers

More from Fraud Division programs

  • Types of fraud cases
  • Tracking fraud cases
  • Insurer responsibilities
  • Special Investigation Unit (SIU) requirements