State RegulationsCO specificDifficulty 2/5
A claims employee of a Colorado Springs insurer reports in good faith her supervisor's suspected claim fraud to the company's anti-fraud investigator under the insurer's anti-fraud plan. The suspicion later proves unfounded. Under C.R.S. § 10-1-128, what protection applies to the employee?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-1-128 requires each licensed insurer to maintain an anti-fraud plan to prevent, detect, and investigate fraud, and it grants immunity to good-faith reporters. Because the employee reported a suspected violation in good faith, her later-disproven suspicion does not create liability; the plan's reporting channel exists to encourage such reports, and the plan itself remains proprietary.
Why the other options are wrong
- A) Immunity attaches to the good-faith nature of the report; a criminal conviction or civil proof of fraud is not a precondition of protection.
- C) The statute does not condition immunity on anonymity; a good-faith internal report through the anti-fraud plan is protected.
- D) Immunity is not reserved for officers; employees who report suspected fraud in good faith are protected.
Memory hook
Good-faith fraud reporters are immune, even if the suspicion fizzles.