CLAIMS ADJUSTER DUTIES AND RESPONSIBILITIES REGARDING FRAUD

1. FRAUD AWARENESSTRAININGBYTHE SIU GROUPFraud Investigations & Security Consultants, LLC5121 Bowden Rd., Suite 307, Jacksonville, FL 32216(904) 828 - 0079

3. Insurance Fraud is not a victimless crime. It is estimated that insurance fraud costs the US $80 billion dollars or more a year. Those costs get passed down to consumers. The Coalition Against Insurance Fraud (CAIF) estimates that cost to be approximately $950 per family.(AS NOTED BY DFS/DIF) INSURANCE FRAUDWhat is Insurance Fraud?Any action taken by an individual with the intent to fraudulently obtain payment from an insurer is considered insurance fraud.

4. CLAIMS ADJUSTER DUTIES AND RESPONSIBILITIES REGARDING FRAUD • Most claims are legitimate, and should be handled and processed as such. Acting or presenting yourself in any other way to a claimant can imply that “you” and the “insurance Company” are acting in “Bad Faith”, and as such exposed to civil and regulatory liability. Many claims though, are inflated or fraudulent. Therefore, it is appropriate for the adjuster to review all claims for possible fraud. • Why ? First of all Fraud is a crime. Second, by reducing paying fraudulent claims we help keep “Premiums” down for all the other policy holders. Third, we are tasked and mandated to “Fight Fraud” by State Laws, Rules, and guidelines. Then finally, but not least, It is the Right thing to do. • The claims adjuster should be familiar with known “possible Fraud” Indicators. These indicators, or fraud possibility factors, should help isolate those claims which merit closer scrutiny. No one indicator by itself is necessarily suspicious or indicative of fraud. Even the presence of several indicators, while suggestive of possible fraud, does not mean that a fraud has been committed. Indicators of possible fraud are not evidence that fraud has occurred. • The indicators should prompt the claims adjuster to look closely at the file, considering possible fraud. Also, they should consult their SIU, or contracted SIU, to at least look at the file as well, and be given a referral for their SIU involvement in the claim. • All suspicious claims, though they may have to be paid for lack of conclusive evidence of fraud, should be referred to NICB. There is no limit to the number of cases you may refer. No claim is too small for referral. *** When we all take these steps in handling claims we help provide a better product to the public.

5. PARTNERS IN FIGHTING INSURANCE FRAUD * FLORIDA DEPARTMENT OF FINANCIAL SERVICES – DIVISION OF INSURANCE FRAUD. * COALITION AGAINST INSURANCE FRAUD. * NATIONAL INSURANCE CRIME BUREAU. * INSURANCE COMPANIES. * SIU – SPECIAL INVESTIGATION UNITS. * CLAIMS ADJUSTERS. * PRIVATE INVESTIGATION AGENCIES CONTRACTED BY INSURANCE COMPANIES. * MANY PRIVATE SECTOR CONTRACT SERVICES

6. JEFF ATWATER, CHIEF FINANCIAL OFFICERFLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF INSURANCE FRAUD _________________________________________ Established by the legislature in 1976, the Division of Insurance Fraud is the law enforcement arm of the Department of Financial Services and is responsible for investigating insurance fraud; crimes associated with personal injury protection (PIP) insurance fraud, insurance premium fraud, workers' compensation claim fraud, workers' compensation premium avoidance and diversions, insurer insolvency fraud, unauthorized entity fraud and insurance agent crimes.

7. DIVISION OF INSURANCE FRAUD ANNUAL REPORT 2010-11 • 2010/11 DIF REFERRALS TOTAL 13,452 • PIP Fraud 50% at 6,699 • FOLLOWED BY: • WORKERS’ COMP 11% AT 1,495 • VEHICLE FRAUD 7% AT 1,008

8. Record Setting First Quarter for Florida Division of Insurance Fraud • Florida Chief Financial Officer Jeff Atwater reported a record setting first quarter for the Florida Department of Financial Services Division of Insurance Fraud (DIF).  With over 100 arrests each month so far in 2012, and the most arrests in over 2 decades for a single month in March, DIF’s impact is being felt. • According to the press release from the Chief Financial Officer’s office: • Under CFO Atwater’s leadership, the division has made nearly 1,400 arrests and recovered more than $150 million in court-ordered restitution. • In addition to these arrests, the division’s investigations have led to the shutting down of more than 50 medical clinics due to intensive Personal Injury Protection (PIP) fraud investigations. PIP fraud constitutes the highest number of referrals to the division, and is a high priority for CFO Atwater. • According to the report, DIF investigations have resulted in over 1,400 arrests and recovery of over $150 million in court ordered restitution.

9. With a 100-year heritage, the National Insurance Crime Bureau (NICB) is the nation's premier not-for-profit organization dedicated exclusively to fighting insurance fraud and crime, and is the only organization in the United States that convenes the collective resources needed to prevent, detect and deter these crimes.  The NICB was formed in 1992from a merger between the National Automobile Theft Bureau (NATB) and the Insurance Crime Prevention Institute (ICPI), both of which were not-for-profit organizations. The NATB – which managed vehicle theft investigations and developed vehicle theft databases for use by the insurance industry – dates to the early 20th century, while the ICPI investigated insurance fraud for approximately 20 years before joining with the NATB to form the present National Insurance Crime Bureau. Today, our membership includes more than 1,100 property and casualty insurance companies, self-insured organizations, rental car companies, parking services providers, and transportation-related firms. Beyond our membership, our 300+ employees work with law enforcement agencies, technology experts, government officials, prosecutors, international crime-fighting organizations and the public to lead a united effort to prevent and combat insurance fraud and crime.

10. NICB Reports a 19 Percent Rise in Questionable Claims Since 2009 • Referrals Break 100,000 Ceiling for First Time • DES PLAINES, Ill., Feb. 28, 2012 — The National Insurance Crime Bureau (NICB) today released its 2011 questionable claims (QC) referral reason analysis. The report examines six referral reason categories of claims:  property, casualty, commercial, workers’ compensation, vehicle and miscellaneous referred in 2011, with those referred in 2009 and 2010.    • In 2009, there were 84,407 QCs referred to NICB from its member insurance companies. In 2010, that number increased to 91,797. In 2011, that number increased again to 100,450—a record level. This represents a 9.4 percent increase from 2010 to 2011. Over the two year timeframe from 2009 to 2011 there was a 19 percent increase. Questionable claims are those claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons.

12. The power of unity Flash back to 1993. Spiraling insurance scams were driving everyone's premiums higher and higher. The nation was struggling with a mounting crime wave, looking for answers. Leaders of the anti-fraud fight realized America needed a catalyst to unite and ignite the power of many diverse groups against rampant fraud. Only a long term commitment would work against such a deeply entrenched problem. The vision of these charter members became the Coalition Against Insurance Fraud — the nation's only anti-fraud watchdog that speaks for consumers, insurance companies, legislators, regulators and others. Control everyone's costs The coalition has become one of America's most trusted and credible anti-fraud forces, thanks to our remarkable diversity. Together, our members are working to control everyone's insurance costs, protect the public safety, and bring this crime wave to its knees. Since its founding in 1993, the coalition has worked effectively to.... • enact tough new anti-fraud laws and regulations • educate the public how to fight back, and • serve as a national clearinghouse of fraud information.

13. STATEWIDE PIP FRAUD ARRESTS APRIL 2012 • PARTIAL LIST • Geraldo Caroni Gomez, 40 – staged acct 04/03/09 (driver) $28,375 - E & B Rehabilitation Center / Franco’s Medical Center (Progressive / State Farm) M • Enrique Moreno, 64 – PIP patient - $787 – Vital Care Medical Center (Allstate) W • Magdalas Mortimer, 38 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O • Marilia Etienne-Lubin, 47 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O • Isemona Pierre, 25 – staged acct 01/07/09 (recruiter) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O • VilnorPerou, 41 – staged acct 01/07/09 (passenger) $46,781 – Michigan Health & Rehab (Avis/Budget / State Farm) O • LaShanda Kaye Pleas, 29 – staged acct 05/01/10 (driver) staged acct 05/27/10 (driver) $30,945 - x (Omni) O • LucsonDupervil, 27 – fake ins card (Geico) W • Edwin Ramirez Montalvo, 39 – fake ins card (National) W • Shenika Keaton, 18 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida • Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O • Talitha Atkinson, 21 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida • Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O • Andre Washington, 29 – staged acct 05/01/10 (passenger) $30,945 - Bedford Medical Chiropractic / Central Florida • Medical & Chiropractic Center / Laurel Rehabilitation Services (Omni) O

14. STATEWIDE DIF PIP CONTACTS • PANHANDLE REGION • Counties: Bay, Calhoun, Escambia, Franklin, Gadsden, Gulf, Holmes, Jackson, Jefferson, Lafayette, Leon, Liberty, Madison, Okaloosa, Santa Rosa, Taylor, Wakulla, Walton, Washington • Tallahassee Field Office - 850.413.3115, Capt. Robert BrongelPensacola Field Office – 850.453.7802, Lt. Joseph Holokan • NORTH REGION • Counties: Alachua, Baker, Bradford, Citrus, Clay, Columbia, Dixie, Duval, Flagler, Gilchrist, Hamilton, Levy, Marion, Nassau, Putnam, St. Johns, Sumter, Suwannee, Union • Jacksonville Field Office - 904.798.5802, Capt. Brian McCoy, Lt. Kevin Jones • WEST CENTRAL REGION • Counties: Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Lee, Manatee, Pasco, Pinellas, Polk, Sarasota • Tampa Field Office - 813.972.8602; Capt. Michael Byrne, Lt. Carlos Rosario, Lt. Darrell Wilson • Fort Myers Field Office - 239.278.7527, Lt. Mark Fritz • EAST CENTRAL REGION • Counties: Brevard, Indian River, Lake, Martin, Okeechobee, Orange, Osceola, Palm Beach, Seminole, St. Lucie, Volusia; West Palm Beach Field Office - 561.837.5601; Maj. Simon Blank, Capt. Glen Hughes, Lt. Evangelina Brooks, Orlando Field Office – 407.835.4402, Lt. Jewel Cameron, Lt. Paul Meyers • LIST CONTINUED ON NEXT SLIDE -

15. STATEWIDE DIF PIP CONTACTS CONTINUED – SOUTH REGION Counties: Broward, Dade, Monroe Miami Field Office - 305.536.0302 Capt. Steven Smith Lt. Violeta Serrano Lt. John Dygon Lt. Stanley Jean-Felix Plantation Field Office - 954.321.2902 Lt. Bill Lee South Florida Major Medical Fraud Task Force Supervisory Special Agent Fred Burkhardt 954.329.7427 Central Florida Major Medical Fraud Task Force Supervisory Special Agent Dennis Russo 863.967.6904

16. BREAKING NEWS – PIP REFORM • Breaking News - Governor Scott Signs PIP Bill • On May 4 in Jacksonville, Governor Rick Scott signed legislation to reform auto accident fraud in Florida, this year’s number one consumer protection issue. This meaningful legislation will lower the cost of auto insurance premiums for Florida drivers by limiting fraud in Personal Injury Protection (PIP) insurance. Accident fraud would have cost average Floridians over $1 billion this year if PIP reform was not passed. • “Growing up in a family without a lot of money, I truly understand the value of the hard-earned dollar for Florida families,” Governor Scott said. “By helping reduce fraudulent auto accident claims, this legislation will benefit the pocketbooks of every Florida family who drives an automobile. I am glad to do my part in keeping the cost of living low in Florida, and I will continue to work to find ways to do so.” • Florida Chief Financial Officer Jeff Atwater released the following statement regarding Gov. Scott’s signing of the bill: • “With the signing of this bill today, Florida will release the chokehold that fraud has on Florida’s insurance consumers. I commend Gov. Scott for signing this important piece of legislation and for his tireless work to ensure that we pass significant reforms to protect our fellow Floridians.

17. DIF – BWCF, BUREAU OF WORKERS COMP FRAUD

18. DFS – DIF FRAUD ARRESTS 2011 WORKERS COMPENSATION CLAIMS

20. CHANGES COMING IN WORKERS COMP LAWS TO FIGHT FRAUD • Statement from Chief Financial Officer Jeff Atwater on the Signing of HB 1277 Fighting Workers’ Compensation Fraud • 4/9/2012 Contact: Alexis Lambert 850-413-2842 • TALLAHASSEE—Florida Chief Financial Officer Jeff Atwater today released the following statement regarding Governor Rick Scott’s signing of HB 1277 that aims to curb workers’ compensation fraud. • HB 1277, sponsored by Rep. Daniel Davis (R-Jacksonville) and SB 1586 sponsored by Sen. John Thrasher (R-Jacksonville), was based on recommendations from a work group convened in August 2011 by CFO Atwater to review the practices of certain bad actors in the check cashing services industry that aid in workers’ compensation premium fraud. The work group released its report in November. • “I commend Gov. Scott for signing this important legislation to fight workers’ compensation fraud. As a result of bringing all stakeholders to the table last fall, we were able to recommend policy solutions to the Legislature that protect the responsible players in the marketplace while ensuring those who are diverting more than a billion dollars from Florida’s economy are caught and held accountable.

21. RED FLAGS FOR POSSIBLE WORKERS COMP FRAUD AND ABUSE • The Injured Employee - • Has injuries that are inconsistent with factsof the accident. • Provides multiple versions of howthe accident occurred. • Refuses medical tests or examinations to confirm an injury. • Stays out of worklonger than the doctor prescribed. • Protests excessively about a modified position or returning to work and never seems to improve. • Has a suspicious prior historyof reporting subjective injuries. • Has a questionable identity, residence or contact information • Was experiencing financial difficultiesprior to submission of a claim and inquires about a quick claim settlement. • Is retiring, on probation, involved in a labor dispute, disgruntled, a poor job performer or subject to disciplinary action. • Is a new employee, nomadic, a seasonal worker or on short-term employment. • Is never at home, does not answer telephone or avoids the use of U.S. Mail. • The Accident or Illness – • Lacks witnesses. • Occurs late on a Fridayafternoon (especially if not reported until Monday) or early on a Monday morning. • Is not associated with employee's job duties. • Occurred in an area not frequented by employee. • Is not reported to the employer in a timely way. • Leads to rumors at work that the accident was staged or illegitimate.

22. Indicators of Vehicle Theft Fraud Indicators of Fraud Concerning the Insured * Has lived at current address less than six months * Has been with current employer less than six months * Address is a post office box or mail drop * Does not have a telephone * Listed number is a mobile/cellular phone * Is difficult to contact * Frequently changes address and/or phone number * Place of contact is a hotel, tavern, or other than employment or residence * Handles all business in person, thus avoiding the use of mail * Is unemployed * Claims to be self-employed but is vague about the business details * Has recent or current marital and/or financial problems * Has a temporary, recently issued, or out-of-state driver’s license * Driver’s license has recently been suspended More indicators listed on the next slide -

23. Indicators of Fraud Concerning the Insured (Continued) • Recently called to confirm and/or increase coverage • Has an accumulation of parking tickets on vehicle • Is unusually aggressive and pressures for quick settlement • Offers inducement for quick settlement • Is very knowledgeable of claims process and insurance terminology • Income is not compatible with value of insured vehicle • Claims expensive contents in vehicle at time of left • Is employed with another insurance company • Wants a friend or relative to pick up settlement check • Is behind in loan payments on vehicle and/or other financial obligations • Avoids meetings with investigators and/or claim adjusters • Cancels scheduled appointments with claim adjusters for statements and/or examination under oath • Has a previous history of vehicle theft claims

24. Indicators of Fraud Related to the Vehicle • Was purchased for cash with no bill of sale or proof of ownership • Is a new or late model with no lien holder • Was very recently purchased • Was not seen for an extended period of time prior to reported theft • Was purchased out of state • Has a history of mechanical problems • Is a "gas guzzler" • Is customized, classic, and/or antique • Displayed "for sale" signs prior to theft • Was recovered clinically/carefully stripped • Is parked on street although garage is available • Was recovered stripped, but insured wants to retain salvage, and repair appears to be impractical • Is recovered by the insured or a friend • Purchase price was exceptionally high or low • Was recovered with old or recent damage and coverage was high deductible or no collision coverage More indicators on the next slide -

25. Indicators of Fraud related to the vehicle – CONT’D • Coverage is only on a binder • Has an incorrect VIN (e.g. not originally manufactured, inconsistent with model) • VIN is different than VIN appearing on the title • VIN provided to police is incorrect • Safety certification label is altered or missing • Safety certification label displays different VIN than is displayed on vehicle • Has theft and/or salvage history • Is recovered with no ignition or with steering lock damage • Is recovered with seized engine or blown transmission • Was previously involved in a major collision • Is late model with extremely high mileage (exceptions: taxi, police, utility vehicles) • Is older model with exceptionally low mileage (i.e., odometer rollover/rollback) • Is older or inexpensive model and insured indicates it was equipped with expensive accessories which cannot be substantiated with receipts • Is recovered stripped, burned, or has severe collision damage within a short duration of time after loss allegedly occurred • Leased vehicle with excessive mileage for which the insured would have been liable under the mileage limitation agreement

26. Indicators of Fraud Related to Coverage • Loss occurs within one month of issue or expiration of the policy • Loss occurs after cancellation notice was sent to insured • Insurance premium was paid in cash • Coverage obtained via walk-in business to agent • Coverage obtained from an agent not located in close proximity to insured’s residence or work place • Coverage is for minimum liability with full comprehensive coverage on late model and/or expensive vehicle • Coverage was recently increased

27. Indicators of Fraud Related to Reporting • Police report has not been made by insured or has been delayed • No report or claim is made to insurance carrier within one week after theft • Neighbors, friends, and family are not aware of loss • License plate does not match vehicle and/or is not registered to insured • Title is junk, salvage, out-of-state, photocopied, or duplicated • Title history shows non-existent addresses • Repair bills are consecutively numbered or dates show work accomplished on weekends or holidays • An individual, rather than a bank or financial institution, is named as the lien holder

28. Other General Indicators of Vehicle Theft Fraud • Vehicle is towed to isolated yard at owner’s request • Salvage yard or repair garage takes unusual interest in claim • Information concerning prior owner is unavailable • Prior owner cannot be located • Vehicle is recovered totally burned after theft • Fire damage is inconsistent with loss description • VINs were removed prior to fire

29. Indicators of Casualty Fraud CLAIMS ADJUSTER SHOULD CONSIDER THE FOLLOWING • Most claims are legitimate, but many are inflated or fraudulent. Therefore, it is appropriate for the adjuster to review all claims for possible fraud. Determining the "fraud probability" of any claim is facilitated when the adjuster is familiar with various fraud indicators. • These indicators, or fraud possibility factors, should help isolate those claims which merit closer scrutiny. No one indicator by itself is necessarily suspicious. Even the presence of several indicators, while suggestive of possible fraud, does not mean that a fraud has been committed. Indicators of possible fraud are not evidence that fraud has occurred. • All suspicious claims, though they may have to be paid for lack of conclusive evidence of fraud, should be referred to NICB There is no limit to the number of cases you may refer. No claim is too small for referral.

30. General Indicators of Insurance Fraud • Claimant or insured is excessively eager to accept blamefor an accident, or is overly pushy or demanding of a quick, reduced settlement. • Claimant or insured is unusually familiar with insurance termsand procedure, medical, or vehicle repair terminology. • One or more claimants or insured list a post office boxor hotel as address. • All transactions were conducted in person; claimant avoids using the telephone or the mail. • The kind of accident or type of vehicles involved arc not typical of those seen on a regular basis. • Claimant threatensto go to an attorney or physician if the claim is not quickly settled. • Claimant is a transientor out-of-towner on vacation.

31. Indicators of Automobile Accident Schemes • Either no police report or an over-the-counter report for an accident resulting in multiple injuries and/or extensive physical damage. • Accident occurred shortly after one or more of the vehicles were purchased or registered, or after the addition of comprehensive and collision coverage to the policy. • Insured has a history of accidents within a short period of time on one policy. Index returns indicate an active claim history. • Insured has no record of prior insurance coverage although damaged vehicle was purchased much earlier than inception of policy and date of loss. • Expensive, late model automobile was recently purchased with cash (no lien holder). • Attorney's lien or representation letter is dated the day of the accident or soon after.

32. Indicators of Auto Physical Damage Fraud • Serious accident with expensive physical damage claim but only minor, subjectively diagnosed injuries, with little or no medical treatment. • Despite expensive damage claims, the claimant vehicle remains drivable. Often, there are no towing charges for removing vehicle from the scene of the accident. • Claimant vehicle was struck by a rental vehicle soon after the rental had occurred. • Claimant vehicle is not to be repaired locally, but driven or shipped out of state for repair. • All vehicles in a reported accident are taken to the same body shop. • Claimant vehicles are not readily available for independent appraisal. • Reported accident occurred on private property near residence of those involved.

33. Indicators of Medical Fraud/Claim Inflation • Three or more occupants in the claimant or "stuck vehicle"; all of them report similar injuries. • All injuries are subjectively diagnosed, such as headaches, muscle spasms, traumas, and others. • Medical claims are extensive, but collision is minor with little physical damage to vehicle. • All of the claimants submit medical bills from the same doctor or medical facility. • Medical bills submitted are photocopies of originals. • Summary medical bills are submitted without dates and descriptions of office visits and treatments, or treatment extends for a lengthy period without any interim bills. • Vehicle driven by claimant is an old "clunker" with minimal coverage. • Insured, even though legally liable for accident, is adamant that claimants were responsible for accident, indicating that the insured may have been "targeted" by the claimants.

34. Indicators of Medical Fraud/Claim Inflation • Claimants retain legal representation immediately after the accident is reported. • Minor accident produces major medical costs, lost wages and unusually expensive demands for pain and suffering. • Past experience demonstrates that the physician's bill and report, regardless of the varying accident circumstances, is always the same. • Treatment prescribed for the various injuries resulting from differing accidents is always the same in terms of duration and type of therapy. • Medical bills indicate routine treatment being provided on Sundays and holidays.

35. Indicators of Lost Earnings Fraud • Employment information is for an unknown business, often with a post office box for address, or a street address in a residential area. • Business telephone number is connected to an answering machine or answering service. • Lost earnings statement is handwritten or typed on blank paper, not business letterhead. • Claimant started employment shortly before accident occurred, or is self-employed. • One or more elements of claim is questionable: e.g. length of absence, rate of pay, income incompatible with claimant's residence. • Efforts to verify lost wage statement with employer raise doubts about employer's legitimacy or about the actual employment of claimant.

36. FLORIDA STATUTES, CHAPTER 626 INSURANCEFRAUDULENT PROOF OF LOSS - CRIMINAL VIOLATION • The 2011 Florida Statutes Title XXXVII INSURANCE Chapter 626INSURANCE FIELD REPRESENTATIVES AND OPERATIONS • 626.8797 Proof of loss; fraud statement.—All proof of loss statements must prominently display the following statement: • “Pursuant to s. 817.234, Florida Statutes, any person who, with the intent to injure, defraud, or deceive any insurer or insured, prepares, presents, or causes to be presented a proof of loss or estimate of cost or repair of damaged property in support of a claim under an insurance policy knowing that the proof of loss or estimate of claim or repairs contains any false, incomplete, or misleading information concerning any fact or thing material to the claim commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s.775.084, Florida Statutes.”

37. SIU DESIGNATE AND DIF • Division of Insurance Fraud • COMMUNICATION:  Section 626.989(4)(d), F.S. provides that persons identified as designated employees whose responsibilities include the investigation and disposition of claims relating to suspected fraudulent insurance acts may share information relating to persons suspected of committing fraudulent insurance acts with other designated employees employed by the same or other insurers whose responsibilities include the investigation and disposition of claims relating to fraudulent insurance acts, provided the department has been given written notice of the names and job titles of such designated employees prior to such designated employees sharing information. Unless the designated employees of the insurer act in bad faith or in reckless disregard for the rights of any insured, neither the insurer nor its designated employees are civilly liable for libel, slander, or any other relevant tort, and a civil action does not arise against the insurer or its designated employees.  • ADD or DELETE A DESIGNATED EMPLOYEE:  Click on DIFSIUAdmin@MyFloridaCFO.com to provide the written notice of the NAME and JOB TITLE of the “designated employee” whose responsibilities include the investigation and disposition of claims relating to suspected fraudulent acts. The email request must also provide the insurer identifiers making the request • Contact SIU Administrator: • Denise PratherSenior Management Analyst I200 East Gaines StreetTallahassee, Florida  32399-0324 DIFSIUAdmin@MyFloridaCFO.com

38. INSURANCE ANTI-FRAUD PLAN REPORTING TO DFS - DIF • Rule Chapter 69D-2, FAC was adopted September 15, 2006. Effective 20 days from this date insurers and Health Maintenance Organizations (HMO) were required to file updated SIU Descriptions or Anti-fraud plans pursuant to section 626.9891, Florida Statutes. The type of filing will be differentiated by the insurer’s volume of Florida annual direct written premium for calendar year 2006. Those insurers that write $10 million or more in annual direct written premium are subject to Section 626.9891(1), F.S. and 69D-2.003, FAC and those that write less than $10 million in annual direct written premium are subject to Section 626.9891(2), F.S. and 69D-2.004, FAC. • Rule Chapter 69D-2, FAC requires that insurers and HMOs file the updated SIU descriptions and anti-fraud plans on the division’s on-line, electronic database known as IFPR (INSURANCE FRAUD PLAN REPORTING). Further, the rule stipulates that insurers and HMOs must file the updated SIU descriptions AND/OR anti-fraud plans on FORMS specified by the division. There are only two types of forms available. The available forms are indicated below. An insurer or HMO will only make one filing, either the SIU description or anti-fraud plan depending on their premium volume. • Continued next slide -

39. RULE 69D-2 • 69D-2.001 Purpose and Scope. • The purpose of this rule chapter is to implement the provisions of Section 626.9891, F.S., establishing guidelines and reporting requirements for insurer anti-fraud investigative units and anti-fraud plans. • 69D-2.002 Definitions. • For the purposes of this rule: • (1) “Division” refers to the Department of Financial Services, Division of Insurance Fraud. • (2) “NAIC” refers to the National Association of Insurance Commissioners. • (3) “Office” refers to the Office of Insurance Regulation. • (4) “SIU” refers to an insurer’s internal or contracted anti-fraud investigative unit.

40. 69D-2.003 Insurer SIUs • (1) An insurer subject to Section 626.9891(1), F.S., shall file with the Division a detailed description of their SIU, and shall submit the following information in the SIU description to satisfy this filing requirement: • (a) The names of all personnel assigned to the SIU, and a description of each person’s work responsibilities relating to the SIU’s anti-fraud efforts; • (b) An acknowledgment that the SIU has established criteria that will be used to detect suspicious or fraudulent activity during investigations relating to the different types of insurance offered by that insurer; • (c) An acknowledgment that the SIU has established criteria that will be used for the investigation of acts of suspected insurance fraud relating to the different types of insurance offered by that insurer. • (d) An acknowledgment that the insurer or SIU shall report all suspected fraudulent insurance acts directly to the Division electronically via Form DFS-L1-1691 (Eff. 10-5-06) “Suspected Fraud Referral Form,” or an electronic reporting interface that is linked to such form, as provided on the Division’s website at www.myfloridacfo.com • (e) An acknowledgment that all such reports of suspected insurance fraud shall contain information that clearly defines and supports the allegation of suspicious activity. • . Form DFS-L1-1691 (Eff. 10-5-06) Suspected Fraud Referral Form i

41. 69D-2.003 Insurer SIUs Continued from previous slide • (f) An acknowledgment that the insurer or SIU shall record the date that suspected fraudulent activity is detected, and shall record the date that reports of such suspected insurance fraud are sent directly to the Division; • (g) An acknowledgment that the insurer or SIU shall provide training relating to the detection and investigation of fraudulent insurance acts for all personnel involved in anti-fraud related efforts. • (h) An acknowledgment that the insurer or SIU shall provide on-going training during the reporting period; • (i) The contact information including names, email addresses, and telephone numbers, for personnel designated by the insurer or SIU to be responsible for achieving and maintaining compliance with Section 626.9891(1), F.S., and this rule chapter; • (j) The insurer’s NAIC individual and group code numbers; • (2) An insurer or SIU subject to Section 626.9891(1), F.S., and this rule chapter, shall submit this SIU description electronically via the Division’s website at www.myfloridacfo.com. The SIU description shall be submitted electronically on Form DFS-L1-1689 (Eff. 10-5-06) “SIU Description Form” as provided on the Division’s website at www.myfloridacfo.com • (3) Nothing in this rule shall require that an SIU utilize all established criteria in every circumstance.. Form DFS-L1- • 1689 (Eff. 10-5-06) SIU Description Form is hereby adopted and incorporated by reference. The insurer’s filing of the information required in subsection (1) above shall constitute an adequately detailed description of its SIU as required by Section 626.9891(1),F.S. • (4) The filing of the information required herein is not intended to constitute a waiver of an insurer’s privilege, trade secret, • confidentiality or any proprietary interest in its SIU, its SIU description, or its SIU policies and procedure

42. INSURANCE ANTI-FRAUD PLAN REPORTING TO DFS - DIF • At the time the rule was promulgated, there was no requirement* to submit annual or subsequent SIU descriptions or anti-fraud plan filings UNLESS THE CARRIER MAKES CHANGES in its anti fraud personnel (#2) or contact information (#6). If a carrier changes its name or is sold to a different insurance group, the carrier should submit an updated SIU description and or anti-fraud plan filing. The carrier should contact Denise E. Prather, DIF, FL DFS at Denise.Prather@MyFloridaCFO.Com to advise the proposed changes. *This is always subject to change so please periodically check to determine if DIF has modified the rule or the statute. • The following are required forms for submitting the SIU description and anti-fraud plan filings: • Form DFS-L1-1689/SIU Description – Word/PDF – if more than $10 million in Florida annual direct written premium.Form DFS-L1-1689 (Word) Form DFS-L1-1689 (PDF) • Form DFS-L1-1690/Anti-fraud plans – Word/PDF – if less than $10 million in Florida direct written premiumForm DFS-L1-1690 (Word)Form DFS-L1-1690 (PDF)

43. INSURANCE ANTI-FRAUD PLAN REPORTING TO DFS - DIF Continued from last slide - Once the form is selected, the user will click on the form and “save” the form file to your computer files. You can save it as the form number, but it may be better to rename it after the form has been completed. The insurer or HMO should complete each of the component requirements (Questions) on the form. You can click “Instructions for Filing SIU Descriptions and Anti-fraud plans to IFPR” for detailed instructions to make the filing. For background, our division is seeking declaratory statements acknowledging the component requirements of the rule in the form filing. The rule filing allows an insurer to acknowledge specific component requirements without having to submit the detail of these requirements to the division. However, FL OIR Market Investigations may conduct audits of insurers. The insurer must be prepared to show that it has documented measures and plans in place that demonstrate the component requirements are viable within the SIU or insurer organization. We are only looking for acknowledgements of the component requirements as shown in the rule as Florida has a broad public records law and the anti fraud plan and SIU descriptions are subject to public record. However, it is important that your company develop viable investigative and detection techniques for their anti fraud personnel and claim staff. The OIR will look at training documentation records, referrals made to the division, claim files to be certain that adjusters have knowledge of “red flags” to detect insurance fraud, and tracking the time frame from when the suspected fraud is detected to when the suspected fraud is referred to the Division.

44. WORKERS COMP ANTI-FRAUD PLANSFILING WITH DFS - DIF • The Florida 2003 Legislature required all Workers Compensation carriers to submit a series of statistical and narrative data on its experience and maintenance of its anti-fraud efforts. We created the Workers’ Compensation Anti-Fraud (WCAF) Report filing system for WC carriers to report this data. The first thing you must do is activate a new account. This must be done every year. We ask for basic identifying information, including an email address and a password. You will receive an email that includes the account code and a link to the WCAF database. You will click on the link to begin the WCAF report filing. It is a simple report to complete. We provide Frequently Asked Questions which explains much of the process as well as provides definitions of the data required. Thank you for using this electronic report filing system. • Workers’ Compensation Annual Anti-Fraud Report Filing: • Effective August 1, of every year, each insurer writing workers' compensation insurance in Florida shall report to the Division of Insurance Fraud, Bureau of Workers’ Compensation Fraud its experience in implementing and maintaining an anti-fraud special investigative unit (SIU) or an anti-fraud plan. DFS Informational Memorandum 04-002 describes the statistical data required pursuant to 626.9891 (6), Florida Statutes. • The time period for 2010 reporting is July 1, 2010 through June 30, 2011 (but carriers may use a calendar year period 1-1-2010 through 12-31-2010 or any other annual period, but please advise what period is reported in the “Description of the organization of the SIU or anti-fraud unit” section. Continued on next slide -

45. WORKERS COMP ANTI-FRAUD PLAN FILING WITH DFS - DIF Continued from previous slide • The report filing requires: • The dollar amount of recoveries and losses delineated by type of WC fraud. • The number of referrals submitted to the Bureau of Workers’ Compensation Fraud delineated by type of WC fraud. • A description of the organization of the SIU or anti-fraud unit including position titles and descriptions of staffing. • The “rationale” for the level of staffing and resources being provided based on such criteria as the number of policies written for the above referenced report data period, the number of claims received for the report data period, the number of suspected fraudulent claims detected for the report data period, an assessment of optimal case load that can be handled by an SIU investigator for the report data period and other factors that explain the level of staffing and resources. • A description of education and training provided to underwriting and claims personnel to assist in identifying and evaluating instances of suspected fraudulent acts in underwriting or claims activities. • A description of a public awareness program focused on the costs and frequency of insurance fraud and methods by which the public can prevent it. • Please note that if an insurance carrier is licensed to insure workers’ compensation coverage, but did not write WC coverage during the reporting period (7-1-2010 to 6-30-2011) the carrier will activate a new account, select the carrier and submit a “No Data to Submit” report filing. • The electronic Workers’ Compensation Anti-Fraud (WCAF) report filing is accessible by July 1, 2011 and will be available until September 30, 2011. The WCAF report filing can be accessed via

46. FLORIDA STATUTES, CHAPTER 626, IMUNITY STATUTE – Protection against Civil Liability for providing information regarding suspected fraudulent insurance acts. • 626.989 Investigation by department or Division of Insurance Fraud; compliance; immunity; confidential information; reports to division; division investigator’s power of arrest.— • (c) In the absence of fraud or bad faith, a person is not subject to civil liability for libel, slander, or any other relevant tort by virtue of filing reports, without malice, or furnishing other information, without malice, required by this section or required by the department or division under the authority granted in this section, and no civil cause of action of any nature shall arise against such person:1. For any information relating to suspected fraudulent insurance acts or persons suspected of engaging in such acts furnished to or received from law enforcement officials, their agents, or employees; • 2. For any information relating to suspected fraudulent insurance acts or persons suspected of engaging in such acts furnished to or received from other persons subject to the provisions of this chapter; • 3. For any such information furnished in reports to the department, the division, the National Insurance Crime Bureau, the National Association of Insurance Commissioners, or any local, state, or federal enforcement officials or their agents or employees; or • 4. For other actions taken in cooperation with any of the agencies or individuals specified in this paragraph in the lawful investigation of suspected fraudulent insurance acts.

47. FLORIDA STATUTE CHAPTER 626 - DESIGNATED SIUs SHARING INFORMATION WITH OTHER SIUs, CIVIL LIABILITY PROTECTIONF.S. 626.989(4)(d) • (d) In addition to the immunity granted in paragraph (c), persons identified as designated employees whose responsibilities include the investigation and disposition of claims relating to suspected fraudulent insurance acts may share information relating to persons suspected of committing fraudulent insurance acts with other designated employees employed by the same or other insurers whose responsibilities include the investigation and disposition of claims relating to fraudulent insurance acts, provided the department has been given written notice of the names and job titles of such designated employees prior to such designated employees sharing information. Unless the designated employees of the insurer act in bad faith or in reckless disregard for the rights of any insured, neither the insurer nor its designated employees are civilly liable for libel, slander, or any other relevant tort, and a civil action does not arise against the insurer or its designated employees: • 1. For any information related to suspected fraudulent insurance actsprovided to an insurer; or • 2. For any information relating to suspected fraudulent insurance acts provided tothe National Insurance Crime Bureau or the National Association of Insurance Commissioners.

48. SIU INVOLVEMENT IN THEINSURANCE CLAIM Initiate SIU involvement by – the Claims Adjuster detecting at least one “Red Flag” or possible “Fraud Indicators” and makes a Referral to SIU. 1. The SIU Investigator will meet with the claims adjuster personally, if possible. 2. SIU will review the claim for all elements of possible Fraud, as well as claims handling. 3. The SIU Investigator will then set an Action Plan for SIU tasks, and if necessary for the claims adjuster. The SIU Investigator may do the following in their Action Plan; A. Run background check on Claimant B. Review tape of initial Loss Statement C. Retrieve and review medical billing D. SIU to go to the loss scene, photos, and canvass the area for witnesses, take statements E. Go to the body shop, photos, interview shop repair person. F. Order any specialty investigation, such as Cause & Origin, or accident reconstruction. G. Consider ordering a surveillance H. FWP Leads developed from initial investigation I. Order and conduct an Examination Under Oath J. Coordinate efforts with DIF, reporting suspicious claim to DIF K. Participate in Claim File Conference

49. THE SIU GROUPFraud Investigations & Security Consultants, LLC5121 Bowden Rd., Suite 307, Jacksonville, FL 32216 (904) 828-0079 (904) 463-5632 thesiugroup.com info@thesiugroup.com WELCOME - THE SIU GROUP is a Florida based company, Fraud Investigations & Security Consultants, LLC, located in Jacksonville that provides SIU- Private Investigative Services in the following areas; Orlando, Tampa, Ft. Lauderdale, West Palm, SW Florida, and Jacksonville. These services include; EUO, Loss Scene, Claimant/Witness Recorded Statements, and Surveillance. Conducted by Florida licensed Private Investigators with prior in-house SIU and Claims Adjuster experience. ************************************************************************ Our associates are experienced and trained SIU Investigators and Claims Adjusters that provide Private Investigation services to augment the Insurance Company Claims Department in their fight against insurance fraud. • * Claim File Review ID Fraud Issues • SIU Action Plan • Loss scene investigation • Recorded Statements • Surveillance • EUOs • Claim File Conference • Referrals to DFS – DIF • File Fraud Plans • Fraud Awareness Training