State RegulationsPA specificDifficulty 2/5
A Pennsylvania producer knowingly submits a fabricated invoice to support an inflated claim on a client's policy. Which statement about his exposure is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Fraudulent insurance acts are addressed on two Pennsylvania tracks. The Insurance Fraud Act, 40 P.S. §§ 325.1-325.62, establishes the civil and administrative framework for fraudulent insurance acts, and the Crimes Code provision at 18 Pa. C.S. § 4117 makes insurance fraud a crime. A producer who fabricates documentation to inflate a claim therefore faces enforcement under the Insurance Fraud Act as well as potential criminal prosecution under 18 Pa. C.S. § 4117, and the Pennsylvania Insurance Department can impose licensing discipline on top of both.
Why the other options are wrong
- B) The state is directly involved through the Insurance Fraud Act and the Crimes Code; a private lawsuit would not displace them.
- C) The fraudulent act is complete when the false supporting material is knowingly submitted; payment of the claim is not a precondition to state action.
- D) The producer who fabricated and submitted the document is independently liable; the claim's ownership by the client does not insulate the producer.
Memory hook
Fabricate a document, face two tracks: the Insurance Fraud Act and the Crimes Code.