State RegulationsNJ specificDifficulty 1/5
Under New Jersey's Insurance Fraud Prevention Act, which of the following describes insurance fraud?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 et seq., reaches the knowing presentation or making of false statements in connection with insurance transactions — inflated claims, fabricated losses, or false answers on an application. The touchstone is a statement made knowingly and falsely in an insurance context, whether by an applicant, a claimant, a producer, or an insurer. The New Jersey Department of Banking and Insurance and the state's fraud-fighting framework enforce the act, and violations carry civil exposure.
Why the other options are wrong
- A) Prompt filing is exactly what insurers and the law encourage; timeliness is not fraud.
- B) Questioning a denial is a policyholder's legitimate right, protected rather than punished under New Jersey law.
- D) A fully disclosed, comparable replacement is honest marketing; there is no false statement for the fraud act to attach to.
Memory hook
Fraud = a knowing lie in an insurance transaction — application, claim, or anywhere in between.