State RegulationsCO specificDifficulty 2/5
Under Colorado's insurance fraud statute, every licensed insurer must maintain an anti-fraud plan. What must such a plan be designed to accomplish?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
C.R.S. § 10-1-128 requires every licensed insurer to maintain an insurance anti-fraud plan that is designed to prevent, detect, and investigate insurance fraud, to educate employees about fraud, and to provide for reporting to law enforcement. The practical consequence is that fraud fighting is a statutory duty of the insurer itself, not an optional marketing feature.
Why the other options are wrong
- A) The statute requires plans to detect and investigate suspected fraud, not to guarantee denial of every referred claim before it is reviewed.
- C) Fraud plans are proprietary and are not public records under C.R.S. § 10-1-128, so they are not published or disclosed on the insurer's website.
- D) The anti-fraud plan supplements the insurer's own investigative capability; it is not a mechanism for outsourcing claim handling to collection agencies.
Memory hook
A fraud plan must Prevent, Detect, Investigate, Educate, and Report — remember P-D-I-E-R.