ACE Fraud Detection & Prevention 2 — Questions and Answers
Question 1: Which ACORD form field is most commonly manipulated in staged auto accident fraud schemes?
- Date of loss
- Vehicle identification number (VIN) (Correct answer)
- Policy inception date
- Agent code
Correct answer: Vehicle identification number (VIN)
VIN manipulation allows fraudsters to misrepresent vehicle identity, value, or ownership in staged auto accident claims.
Question 2: In the context of ACORD data standards, what is a 'soft fraud' indicator in property claims?
- Filing a claim for a loss that never occurred
- Slightly inflating the value of legitimately damaged items (Correct answer)
- Using a false identity to obtain a policy
- Burning property to collect insurance proceeds
Correct answer: Slightly inflating the value of legitimately damaged items
Soft fraud (opportunistic fraud) involves exaggerating legitimate claims, such as inflating damaged item values, rather than fabricating the entire loss.
Question 3: Which data element in ACORD's AL3 standard is critical for detecting policy stacking fraud in auto insurance?
- Named insured tax ID
- Prior carrier code
- Vehicle use code (Correct answer)
- Multi-car discount flag
Correct answer: Vehicle use code
Vehicle use codes help identify whether a personal-use vehicle is actually being used commercially, a common discrepancy in policy stacking schemes.
Question 4: What is the primary purpose of the NAIC's Special Investigations Unit (SIU) data call?
- Setting premium rates for high-risk policyholders
- Collecting standardized fraud referral data across insurers (Correct answer)
- Licensing fraud investigators in all 50 states
- Maintaining a national database of convicted insurance fraudsters
Correct answer: Collecting standardized fraud referral data across insurers
The NAIC SIU data call collects standardized information about insurer fraud referral activities to benchmark anti-fraud efforts industry-wide.
Question 5: Under the ISO ClaimSearch system, what triggers an automatic cross-match alert for a claimant?
- Filing more than one claim per policy period
- Matching name, SSN, or vehicle data against prior claims in the database (Correct answer)
- Claiming injuries without a police report
- Switching insurers within 30 days of a loss
Correct answer: Matching name, SSN, or vehicle data against prior claims in the database
ISO ClaimSearch cross-matches claimant identifiers such as name, SSN, and vehicle data against its national claims database to surface prior loss patterns.
Question 6: Which red flag is MOST indicative of medical provider fraud in workers' compensation claims?
- Claims filed on Mondays
- Billing for procedures not supported by the diagnosis code (Correct answer)
- Claimant returning to work sooner than expected
- Multiple claims from one employer within a year
Correct answer: Billing for procedures not supported by the diagnosis code
Upcoding or billing for procedures inconsistent with the diagnosis is a primary indicator of medical provider fraud in workers' compensation.
Question 7: What role does ACORD's XML framework play in real-time fraud detection?
- It encrypts all policy data to prevent data breaches
- It enables structured, machine-readable data exchange that feeds analytics and fraud scoring engines (Correct answer)
- It mandates SIU referrals within 48 hours of claim intake
- It generates automatic fraud scores for each new policy
Correct answer: It enables structured, machine-readable data exchange that feeds analytics and fraud scoring engines
ACORD XML standards provide structured data formats that allow insurers to feed consistent, normalized data into fraud analytics and scoring systems.
ACE Fraud Detection & Prevention 2
Which ACORD form field is most commonly manipulated in staged auto accident fraud schemes?