CIFI key terms

A factual indicator or pattern in a claim that experience shows is associated with fraud, such as an unusual delay in reporting or a loss occurring soon after a policy is issued. A red flag prompts inquiry but is never proof of wrongdoing.

A unit within an insurer staffed with trained investigators who handle claims suspected of fraud, conduct field investigations, and decide whether a case should be referred for prosecution or another remedy.

Fraud that is planned in advance and fabricated for the purpose of collecting insurance money, such as deliberately set fires, invented injuries, or vehicles destroyed on purpose.

Fraud that arises when an otherwise ordinary claim is padded or exaggerated, such as inflating the value of stolen property or asserting injuries that did not occur.

A crash or collision that participants plan and cause deliberately, often to generate bodily injury or property damage claims, sometimes involving recruited passengers and cooperating medical providers.

Misrepresentation by a policyholder or producer at underwriting, such as understating payroll, hiding employees, or misstating a business's operations, to obtain lower premiums than the true risk warrants.

The use of statistical techniques on historical claims data to score new claims or applications by their likelihood of fraud, so that investigators can prioritize referrals.

A departure from expected patterns in how often claims occur or how large they are for a given class of business, geography, or period, which can signal organized or emerging fraud activity.

Submission of inflated, duplicated, unbundled, or entirely fabricated medical bills and treatment records by a health care provider in exchange for payment from an insurer.

A documented, unbroken record of who handled, moved, or stored evidence from the moment it was obtained, used to show the item is authentic and unaltered if the case goes to court.

A formal, sworn question-and-answer proceeding conducted outside court under policy conditions, in which the insured must answer the insurer's questions about a claim while under oath.

A documented interview of an insured, claimant, or witness, usually audio or video recorded and transcribed, that captures the person's account of the loss near the time it happened.

Covert observation and recording of a claimant's activities to verify whether reported injuries or disabilities are consistent with what the person actually does.

A structured fire or loss scene examination that determines where a fire or failure started and what caused it, distinguishing accidental causes from deliberate acts.

A shared industry database of claims and policy information that insurers query to see whether a claimant, vehicle, address, or provider appears in other claims, helping reveal repeat fraud.

The application of accounting methods to financial records, such as bank statements, tax returns, and business books, to test whether a claimed loss, income, or expense is genuine.

A formal, usually sworn policyholder statement documenting the date, cause, and amount of the loss and the claimed items or damages; policy conditions may require it within a set time.

A medical examination of a claimant arranged by the insurer and performed by a physician of the insurer's choosing, used to test whether claimed injuries, treatment, or disability are supported.

Measures that discourage people from attempting fraud in the first place, such as visible controls, training, public messaging, and a credible likelihood that fraud will be detected and punished.

Structured instruction for underwriters, claims staff, agents, and others so they can recognize fraud indicators, follow reporting procedures, and understand their legal duties.

A dedicated confidential channel, often toll-free or online, through which employees, customers, and the public can report suspected fraud, frequently with the option of remaining anonymous.

A written organizational position that suspected fraud will be investigated and referred where warranted, with no informal settlements, applied consistently to all customers and employees.

A government agency, often within a state insurance department, that receives and investigates insurance fraud referrals, coordinates with prosecutors, and compiles fraud data.

The effect of publicized enforcement, convictions, and penalties in discouraging the wider population from attempting similar fraud, as distinct from deterring one particular individual.

A personal, financial, or professional interest that could reasonably influence an investigator's judgment, such as a relationship with a claimant or a stake in a vendor's business.

The duty to limit access to claim, medical, and personal information to those who genuinely need it, and to avoid disclosing it in ways that breach law or policy.

A published set of principles and rules, such as honesty, objectivity, confidentiality, and legal compliance, that defines acceptable conduct for fraud professionals and supports discipline for breaches.

The practice of forming conclusions from evidence alone, setting aside personal feelings, quotas, incentives, or pressure from managers and clients, and documenting the basis for each judgment.

Individually identifiable health information held by covered entities and their business associates, governed by federal privacy rules that limit when it may be used or disclosed.

Items of value offered by vendors, claimants, or service providers that can compromise an investigator's independence; many organizations set strict limits or prohibit them outright.

A false statement of fact in an application or a claim that would have influenced the insurer's decision to issue the policy or to pay the claim.

Cancellation of a policy from its inception, as if it never existed, typically sought when an insured obtained coverage through material misrepresentation; state rules vary on when this remedy is available.

A claim that an insurer or its representative failed to act reasonably and in good faith toward its insured, which can create liability beyond the policy and raise risks when fraud is alleged without support.

A law that protects insurers and investigators from civil liability when they report suspected fraud, or share information with other insurers or authorities, in good faith and without malice.

The deadline set by law for filing a lawsuit or a criminal charge, which determines how long evidence must be preserved and how quickly a fraud matter must be referred.

A false statement of fact, spoken or written, that harms another person's reputation; investigators face this exposure if they communicate suspicions of fraud beyond those with a legitimate need to know.

The level of certainty a party must reach to prevail; civil cases generally require a preponderance of the evidence, while criminal fraud must be proved beyond a reasonable doubt.

A state law listing prohibited claims handling conduct, such as failing to investigate promptly or denying a claim without a reasonable basis, that shapes how fraud denials must be documented.