The Legislature finds and declares as follows:
(a)The business of insurance involves many transactions that have the potential for abuse and illegal activities. There are numerous law enforcement agencies on the state and local levels charged with the responsibility for investigating and prosecuting fraudulent activity. This chapter is intended to permit the full utilization of the expertise of the commissioner and the department so that they may more effectively investigate and discover insurance frauds, halt fraudulent activities, and assist and receive assistance from federal, state, local, and administrative law enforcement agencies in the prosecution of persons who are parties in insurance frauds.
(b)Insurance fraud is a particular problem for automobile policyholders; fraudulent activities account for 15 to 20 percent of all auto insurance payments. Automobile insurance fraud is the biggest and fastest growing segment of insurance fraud and contributes substantially to the high cost of automobile insurance with particular significance in urban areas.
(c)Prevention of automobile insurance fraud will significantly reduce the incidence of severity and automobile insurance claim payments and will therefore produce a commensurate reduction in automobile insurance premiums.
(d)Workers’ compensation fraud harms employers by contributing to the increasingly high cost of workers’ compensation insurance and self-insurance and harms employees by undermining the perceived legitimacy of all workers’ compensation claims.
(e)Prevention of workers’ compensation insurance fraud may reduce the number of workers’ compensation claims and claim payments thereby producing a commensurate reduction in workers’ compensation costs. Prevention of workers’ compensation insurance fraud will assist in restoring confidence and faith in the workers’ compensation system, and will facilitate expedient and full compensation for employees injured at the workplace.
(f)The actions of employers who fraudulently underreport payroll or fail to report payroll for all employees to their insurance company in order to pay a lower workers’ compensation premium result in significant additional premium costs and an unfair burden to honest employers and their employees.
(g)The actions of employers who fraudulently fail to secure the payment of workers’ compensation as required by Section 3700 of the Labor Code harm employees, cause unfair competition for honest employers, and increase costs to taxpayers.
(h)Health insurance fraud is a particular problem for health insurance policyholders. Although there are no precise figures, it is believed that fraudulent activities account for billions of dollars annually in added health care costs nationally. Health care fraud causes losses in premium dollars and increases health care costs unnecessarily.
Notes of Decisions
People ex rel. Alzayat v. Hebb, 226 Cal. Rptr. 3d 867 (Cal. Ct. App. 5th 2017).
· cites it 3× “( Ins. Code, § 1871 et seq. ) Alzayat alleged Hebb made false statements in an incident report submitted in response to Alzayat's claim for workers' compensation, and Hebb repeated those false statements in a deposition taken during the investigation into Alzayat's claim for…”
People Ex Rel. Gov't Employees Ins. v. Cruz, 244 Cal. App. 4th 1184 (Cal. Ct. App. 2016).
“After the investigation, GEICO filed this action alleging defendants violated the Insurance Fraud Prevention Act (the Act) (Ins. Code, § 1871 et seq.; Pen. Code, § 550) and the common law by submitting false insurance claims to GEICO.”
People ex rel. Strathmann v. Acacia Rsch. Corp., 210 Cal. App. 4th 487 (Cal. Ct. App. 2012).
“The purpose of the Insurance Frauds Prevention Act (Ins. Code, § 1871 et seq.) is to supplement government efforts to fight insurance fraud without creating new and expensive bureaucracies.”
Tourgeman v. Nelson & Kennard, 222 Cal. App. 4th 1447 (Cal. Ct. App. 2014).
“(b)(2) met where qui tarn action sought to further objectives of Insurance Frauds Prevention Act (Ins. Code, § 1871 et seq.)]; Carpenters, supra, 124 Cal.”
Longval v. Workers' Comp. Appeals Bd., 61 Cal. Comp. Cases 1396 (Cal. Ct. App. 1996).
· cites it 2× “” (Ins. Code, § 1871, subd. (d).) The prevention of workers’ compensation fraud “may reduce the number of workers’ compensation claims and claim payments thereby producing a commensurate reduction in workers’ compensation costs.”
State ex rel. Wilson v. Superior Court, 79 Cal. Comp. Cases 874 (Cal. Ct. App. 2014).
“to impose civil penalties for violation of the Insurance Fraud Prevention Act (IFPA), Insurance Code section 1871 et seq. The relators allege Bristol-Myers employed runners and cappers to induce physicians to prescribe its drugs to their patients.”
People Ex Rel. Allstate Ins. v. Muhyeldin, 5 Cal. Rptr. 3d 492 (Cal. Ct. App. 2003).
“Defendants argue as follows: 8 The California Legislature modeled The Insurance Frauds Prevention Act (Ins. Code, § 1871 et seq.) after the federal False Claims Act ( 31 U.”
People v. O'Casey, 66 Cal. Comp. Cases 464 (Cal. Ct. App. 2001).
“” Insurance Code section 1871, subdivision (d), containing legislative findings and declarations pertaining to the Insurance Fraud Prevention Act of which section 1871.”
People Ex Rel. Monterey Mushrooms, Inc. v. Thompson, 71 Cal. Comp. Cases 35 (Cal. Ct. App. 2006).
“” (Ins. Code, § 1871, subd. (d).) “Prevention of workers’ compensation insurance fraud may reduce the number of workers’ compensation claims and claim payments thereby producing a commensurate reduction in workers’ compensation costs.”
Cal. Insurance Code § 1871(a)(1): 1 case
Cal. Insurance Code § 1871(d): 1 case
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