Identifying Fraud Indicators in Claims

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Hello everybody and welcome to Adjusted.
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I'm your host, greg Hamlin, coming at you from beautiful Birmingham, Alabama and Berkeley Industrial Comp.
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And I wanted to start this episode with a fun fact.
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Did you know?
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According to the National Insurance Crime Bureau, fraud may be involved in 10% of losses?
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So today we're going to be exploring fraud in claims in insurance, and with me today is my co-host, Chris Drake.
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Chris, do you want to introduce yourself for folks?
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Yeah, I am in hot and steamy Indiana at this point.
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I'm a claims manager at Berkeley Industrial Comp and I've been in the industry for about 16, 17 years.
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Excellent.
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I don't even want to hear it.
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I grew up in Indiana and I would take an Indiana summer over an Alabama summer almost any day.
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I took the kids to the pool the other day to cool off and jumped in and it felt like a hot tub because it's been so hot.
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The pool's like as warm as it is outside.
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So with us also today is our guest, larry Henning.
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He's a senior vice president of anti-fraud and special investigations at Allied Universal Services.
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Larry, if you could say hello to everybody.
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Hey, everyone, and thank you for having me today.
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Larry, if you could say hello to everybody.
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Hey everyone and thank you for having me today.
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I appreciate it.
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Looking forward to it.
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And Larry, where are you out of?
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I am in High Point North.
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Carolina.
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I know exactly where that is.
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They have a baseball team there.
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They're like the rocking chairs or something.
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The Rockers, yep, the Rockers.
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So you're like in the furniture capital of the world.
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I absolutely am known for that and have people from all over the world coming twice a year to showcase their wares.
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So we have a fellow Berkeley company that's right there in High Point in key risk insurance.
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So shout out to my key risk friends, they have their office right by that ball field they do right at the stadium itself.
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So they've got a pretty cool spot.
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I'm a little jealous.
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Especially this time of year.
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I bet it's fun to hang out and watch a game after work.
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So, larry, I wanted to start this conversation talking about the topic of fraud.
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That that's where we were going to go today.
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When you were growing up, in your career day in kindergarten, larry, did you see yourself ending up in this special anti-fraud special investigations?
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In insurance absolutely not but in investigations and law enforcement.
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That was the only career that I really had ever wanted was in investigations, so, and I've been doing it now for 47 years.
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So how did you?
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How did you get into the industry?
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Well, that's a.
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It's a great story.
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I actually started off in law enforcement.
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I was doing an internship in college at a law enforcement agency in Metro Atlanta.
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While I was there the chief asked me was I interested in being in the academy?
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And I said, well, I haven't applied or anything.
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And he put right through and in two weeks later I was starting the academy.
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So I worked law enforcement for about 13 years and I was approached if I'd be interested in the special investigation unit.
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Working insurance fraud had no idea what the SIU was.
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We had worked some cases and presented on insurance, but that was early in the startups of SIUs back in 1989, 1990.
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From that it was an easy call hey, 1989-1990.
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From that it was an easy call hey, we'll double your pay, you won't get shot at, you won't work nights and weekends.
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So, being newly married with just a couple small kids, that was an easy choice to make.
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You're like I'll take it, I'll take it.
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That's wonderful.
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Your life insurance carrier loves it too, for sure.
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So, larry, what types of fraud?
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have you seen in the industry?
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Well, it really runs the gamut when it comes to insurance, because of not only property casualty and everything that entails, and then over on the life, health, disability, certainly the different various specialty lines.
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There really is no part of insurance that's immune to fraud, whether that's from a claim perspective, from underwriting and unfortunately, on occasion, internal as well.
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So you know, I've always I've spent most of my career on the claim side and I've seen a little of some of the others, but claims is where I've spent most of my career.
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Many insureds that I've worked with have injured workers that they don't care for.
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Once they file a claim and they say it's fraudulent.
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And there's a big difference, I think, between somebody who maybe is not an easy person to work with and fraud.
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So, larry, from your perspective, being in the insurance industry, as long as you have what are some of the indicators that help you recognize, maybe there's something more to this claim and it's not just an insurer who's frustrated with an individual, but there's something else here.
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Yeah, and this really goes across any kind of claim type.
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But it's inconsistency in the story.
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When someone reports a claim, no matter what it might be and we'll use some examples, but no matter what it might be and they report that claim to the insurer.
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Let's say it does involve an injured worker, so it's workers' compensation, and they report this to their employer.
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Then they tell friends about it, they go to the doctor and they tell the doctor about it.
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Maybe they've gone to urgent care or an ER and they've told them the story of what happened and why they got hurt or how they got hurt.
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And when all of those stories tend to be different that's what I mean by inconsistency and when we don't look at that level of detail and pay attention to it, we might miss it.
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That's a great point.
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So if and I've actually seen this in my career where some of those inconsistencies, maybe a full investigation wasn't done on the front end of the claim and some of those inconsistencies weren't figured out until months and months later, and then at that point the toothpaste is kind of out of the tube right, it becomes a lot more difficult.
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What are some of the things that an adjuster could be doing to investigate to make sure you know they're catching things and they're not in one of those reactions where nine months later we find out the doctor's report doesn't match this, the statement that was never taken doesn't match the witness statement, all these types of things.
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Yeah, there's several, but I always like to start with, especially when I'm talking to a group of adjusters or even a group of new investigators.
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And that's two key things.
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One, listening.
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My grandmother always told me, larry, they gave you one mouth.
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God gave you one mouth and two ears for a reason he really wants you listening more than he wants you talking.
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So listening skills are huge.
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If I can digress for a second, one of the very first cases when I left law enforcement and went over to insurance as an SIU in the Atlanta area it was a big fire case Chief claim officer there in the Atlanta office brought it to me.
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I literally was my first day on the job.
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I looked at the file.
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I said can I go out to where this house burned down?
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And he said, yeah, it's still a scene, nothing's been touched.
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It was, the fire was a couple of weeks ago and on the way you have to remind this goes back to 1990s.
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So I took the cassette tape and put it in the player in the car to listen to the large loss adjusters interview on my way to the fire scene.
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And I'm listening to this tape.
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The adjuster did a great job.
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This was a 20-year adjuster Did a fantastic job, asked everything I probably would have asked and, at the end of the tape, theial question.
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Thank you very much.
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I appreciate your help and the information you provided.
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I have one final question.
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Did you have anything to do with the starting of the fire at your home?
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And the response on that tape?
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Yes, but I really didn't have a choice.
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And the next words out of the adjuster's mouth is thank you very much.
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Today's date is such and such a time.
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It's time is such and such.
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Thank you for your help.
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I almost crashed the car.
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I got back to the office, told the chief claim officer.
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I said you can deny this claim.
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I said I'll give you more of the detail, but this was an intentionally set fire done by the insured.
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Well, how do you know that?
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I said because he admitted to it.
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So I played the tape for him.
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They died laughing.
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I mean, they just could not.
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And I say that because of listening Back to that.
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We get so ingrained in what we think we should be hearing.
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Next, stuff goes right over our head and we don't hear it, even though it was said.
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So, listening number one, skill Number two is, when we're asking questions, what we really want to arrive at at the end of that interview the who, what, when, where, why, how and how much.
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When you're getting the answers to those questions, you've probably done a pretty darn good interview.
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Those are both really really good points.
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I think I don't know if you can put enough emphasis on active listening, right?
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I think that goes to the point where you're hearing what you're hearing, but something still doesn't add up, and at that point in time you know something needs to be further investigated.
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So what other tools can be utilized?
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If you come up with a situation like that and you understand something just doesn't seem right, my gut seems off.
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What else can you do to investigate the claim?
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Well, what you're looking at is again back to the.
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You're identifying those inconsistencies.
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What conflicting information do you have?
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And then what are those avenues?
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Whether it be a tech tool, a document, a record of some kind, when can I go and find out what the facts are to resolve this inconsistency?
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And I think that's probably the biggest thing is developing a lead and then following that lead.
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I think one of the things that for investigators especially, and certainly adjusters because adjusters just don't that's what they are.
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Adjusters are investigators.
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They just happen to do all the insurance process policy interpretation, settlement evaluation.
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They do all those extra things that the SIU investigators typically aren't doing, and that's why it's good to rely on those investigators and they work in partnership with the adjusters to get to the facts.
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I think we'd all agree that insurance carriers hey, we just want to resolve this with information that's accurate.
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If we owe and we need to pay this claim, then great, we'll pay it.
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But if we don't owe it or there's some provision of the policy that excludes certain coverages, or there's some provision of the policy that excludes certain coverages or there's certain conditions in the policy that might exclude or limit certain pieces, then that's what we follow.
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I think those are key, but developing leads, following those leads sometimes that's going out to get a medical report could be a police report In a vehicle situation, whether it be a collision and it's simply a auto liability bodily injury claim or it's a worker's comp, but it happened to be because they were out in a vehicle for work and got involved in the collision.
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But think of the telematics that are in vehicles nowadays, especially since around 2016, 2017.
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And prior to that and even in still vehicles, obviously on the road today the EDR data from those vehicles and what it can tell you and whether that matches up with the story.
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So you take the original story and then you look for ways to confirm it.
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I'm always a big believer in if you act in good faith in your investigations, if you act in good faith in your adjusting, which means, hey, this is what the insured or this is what the claimant told me, I'm going to go find the evidence and the facts to support what they just told me.
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And if it's not there and the evidence and the information is contrary to that, well so be it.
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But you do it in the mindset of I'm out there to find something to support what they've told me.
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Larry, I think that's a really good point and you know, sometimes carriers get a bad reputation for or at least I think a lot of the plaintiff attorneys like to run commercials that make it sound like insurance carriers are always looking for ways to deny claims, which really isn't true.
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I think you pointed out a really important thing.
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We want to confirm the facts and what works best is when everything lines up and we can process the claim and move forward and it paid out if it needs to be paid out, or get the person the treatment they need if it's a workers' comp claim.
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But I think the good faith piece is really important there that you mentioned One thing for me.
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You mentioned cassette tapes.
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I'm old enough that I remember cassette tapes.
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I made mixed tapes for my girlfriends in middle school back in the day tape recording stuff on the radio, so I can do that and I actually remember in the very beginning as an adjuster we still had cassette tapes at the very beginning of my career.
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Obviously, so much has changed in the last 20 years I don't know like my kids today.
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There's probably a recording of almost everything they did.
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I grew up in the nineties so I'm kind of lucky that there weren't phones with videos on them of all the dumb stuff I did.
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Just lives back in the 90s.
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But you know, now really technology is everywhere.
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How have you seen that change investigations from maybe back when you first started to now?
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It has been huge in the changes.
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Because I'm older, I'd like to think, maybe wiser, certainly more experienced, but in the very early days there weren't even mobile phones.
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We had pagers and you got a page and then you stopped at a pay phone and then called, took to whatever you needed to call.
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So it has really evolved.
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But from investigator tools of, like I said, cassette tapes through to digital recorders, and now even digital recorders are seldom used because a lot of the recordings are direct to the cloud.
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There's other types of devices that you can use now that you record and it actually produces an immediate transcript within seconds.
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Push a button and it creates a summary of what that interview was about in a matter of 15, 20 seconds and you have a pretty detailed summary document as well.
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So that really speeds up and really aids.
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In the old days you took a lot of notes and that's one of the things that you have to be careful about If you're busy taking so many notes, you might miss something.
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Back to the listening part that I talked about earlier.
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So technology has really improved for you to be more accurate, more detailed, with less actual manual effort to do that.
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You know one of the tools that we initiated even prior to COVID.
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I think we launched about a year or two before COVID but it's called InView Interview, like we're on this call.
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But InView is actually a software that is more secure, can't be hacked, has the data privacy and security features to it.
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But in doing that InView or the interview, like what we're doing today with a video, I can bring in maps, I can bring in documents, I can bring in photo images so I can be talking to somebody and interviewing them anywhere and conduct a pretty extensive interview and investigation virtually but still see the person to what you can see on camera.
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So it may be from like the shoulders up, but it's still pretty effective in producing it that way.
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And then when COVID hit and everything went virtual just think about their most special investigation units, most SIUs for insurance companies, whether they were with the insurer or contractors such as myself most everything was in person.
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With COVID almost everything went virtual for a year and a half, two years.
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And now insurers learned hey, you can actually do some really effective investigations virtually and eliminate travel time, travel costs, you know, capacity to handle more cases in a shorter period of time can go up.
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So there was a lot of benefits of technology that were really had to be hot tested, like I like to call it, during COVID, because it was necessary to do that.
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Are you seeing any change to where people are doing more in person, or is it more virtual at this point, since you've had such great success with it?
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It's a big mix.
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Yeah, I've seen several insurers special investigation units convert a significant portion of their staff to virtual doing desktop investigations.
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Here in my own company I have over 500 investigators employee investigators just here in the US.
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About 35 of those are desktop only.
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The rest are in the field.
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But it depends on the assignment as to whether or not it is done virtually or in the field or a mix of both.
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I'd say most SIU investigations are a mix of both.
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And then certainly the surveillance investigators.
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It's always in the field that is not done virtually.
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Now there's other technology now deployed for surveillance that is unmanned.
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So you're using good tech devices to conduct that surveillance.
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Right, that's changed a lot.
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I remember when I first started it was always somebody following somebody in a van, or you know they'd have different ways of doing it.
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Now, cameras are so small that I've seen those green utility poles that look like they're just like a green utility monster, and that there's a camera in there.
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So it's a different world from a surveillance standpoint.
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The other piece of that I'd love you to comment on, larry, is just how social media changed your investigations.
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You know, when I was growing up, there was no social media where my kids you know, whether it's they're taking pictures and sending it through social media or they're hanging out in different ways.
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I think we communicate a lot different than we used to.
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We do.
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And just think about it.
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If an event or incident of any kind occurs out in public and this doesn't mean violent or anything like that, but just it causes a disturbance, where something happens and people take notice, what's the first thing you see?
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If you're out there as well, everybody's holding their phone up recording what's going on, yeah, and it's getting posted out to social media somewhere, and these are uninvolved people to the event that are doing that.
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So, yeah, it is greatly enhanced the ability to find out some information about an event, about an incident car crashes, work comp type cases, really any type of insurance loss you can think of.
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There's the potential of gaining valuable information through social media.
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Now, you can't always believe what you're lying, I see, so you have to do some authentication and validation of what you find on social media as well.
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Yep, well, and another question I had on that, larry.
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So let's say I'm the ambitious adjuster.
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There's a lot of obviously there's a lot of laws around what you can do as far as social media goes, and this is why a company like yours is important, because if someone on my staff was to create a fake social media account and then use that account to try to maybe capture somebody or catch somebody in a lie, there's obviously some concerns with that.
00:21:39.098 --> 00:21:51.246
And so what are some of the things you do when you get that kind of referral that makes sure that when you're doing these investigations, we're following the laws and we're not doing anything that entraps people or causes people privacy issues.
00:21:52.454 --> 00:21:54.621
Well, and those are great questions.
00:21:54.621 --> 00:22:14.280
Probably one of the number one thing that comes up when I talk to chief claim officers about social media is like I do not want my adjusters and my staff out on social media because it's a big time drain and it's a big black hole and they just don't have time.
00:22:14.280 --> 00:22:17.507
And I totally agree with that.
00:22:17.507 --> 00:22:20.818
Yes, there are different privacy issues.
00:22:20.818 --> 00:22:25.769
There are certain legal things that you need to be cognizant of.
00:22:25.769 --> 00:22:48.900
Yeah, I'll use the word, even though it's not appropriate for all social media, but you don't want to have someone go out and friend that individual you're looking for Again, whether it's using a fake account, a real account, it doesn't matter but to make contact with them, especially if they're a represented individual, if they have an attorney.
00:22:48.900 --> 00:22:57.568
So the best way to enhance and do social media and how we operate is we use computer algorithms.
00:22:57.568 --> 00:23:08.557
We use algorithms to tell it this is who we're interested in, this is what we're looking for, and then the algorithms then search.
00:23:08.557 --> 00:23:15.909
So because it's there's literally hundreds and hundreds of social media type sites that are out there.
00:23:15.909 --> 00:23:45.048
So using a computer to go look, I would tell adjusters probably if there was a single piece of information for us to have before we started a social media, and we want quite a bit, but the one that is really, really important is the personal email address of that person, because most people set up their social media accounts with their personal email.
00:23:45.048 --> 00:23:49.465
So that is one of the key pieces of information to look for.
00:23:49.465 --> 00:23:55.768
Yes, we want name and address and whatever identifying information they have as part of that claim.
00:23:56.576 --> 00:24:02.288
The other thing we do with the algorithms is we look for is this involving an injury?
00:24:02.288 --> 00:24:08.028
Is this involving some other type of claim that's not injury related?
00:24:08.028 --> 00:24:18.617
Because we really want to look for things that may be relevant to the loss that we're investigating and that the adjuster is looking at.
00:24:18.617 --> 00:24:29.364
Once the computer pulls all the data down, then we actually have an analyst, a human being, that is now looking at it to make that determination.
00:24:29.364 --> 00:24:32.737
Is this or could this be relevant?
00:24:32.737 --> 00:24:44.780
Because otherwise, almost every case involving doing a social media search, you're going to have hundreds and hundreds and hundreds of pages of stuff that's worthless.
00:24:44.780 --> 00:24:58.067
So you're looking for the links and the data that may mean something to the client or could mean something, or absolutely does mean something to the client.
00:24:58.951 --> 00:25:08.560
I think that's huge too, because you may have some people that post so limited information and are very, very private, and then you have everybody that's going to give you a real-time update on every single thing they do.
00:25:08.560 --> 00:25:16.655
And I think you could have injuries where somebody is posting about an injury five days before it's the weekend.
00:25:16.655 --> 00:25:25.895
They go back in on Monday and they report a work-related accident and you can go back and preview their social media from five days ago and see they are actually injured.
00:25:25.895 --> 00:25:26.839
They are not at work.
00:25:26.839 --> 00:25:30.152
So it's awesome, it's definitely an awesome tool.
00:25:30.152 --> 00:25:31.816
And it tells me too you got to.
00:25:31.816 --> 00:25:33.441
You got to watch that digital footprint.
00:25:33.441 --> 00:25:36.136
So, greg, you better start deleting some of your accounts real quick.
00:25:36.136 --> 00:25:37.441
He's going to find you.
00:25:38.070 --> 00:25:39.893
I got to stop dancing.
00:25:39.893 --> 00:25:42.816
I got to stop dancing and put my videos up, right With my kids.
00:25:43.016 --> 00:26:04.085
Yeah, one of the things that's really important it's social media related, but it's not necessarily to a person at the time, but especially if the event you're interested in occurred out in public, go back to the scenario we talked about a few minutes ago.
00:26:04.085 --> 00:26:12.494
It may not be that insured or claimant, whoever it might be, it may not be their social media that I'm really looking for, but I don't know who's I need to look at.
00:26:12.494 --> 00:26:21.376
So we've got a product called geo intel and you're geo fencing a physical area with GPS coordinates.
00:26:21.376 --> 00:26:54.301
You're putting in some date and time ranges and then you're putting in the type of event let's say a car crash that you're looking for and then you let the algorithm go out and look for any posting by anybody involving a car crash between that date and time range within this geo-fenced area, the GPS coordinates, and then see what it returns.
00:26:55.029 --> 00:27:06.724
I mean, we have located literally witnesses to an accident in which everyone that became known to the police said party one was at fault.
00:27:07.006 --> 00:27:25.045
They did this, yet the video doesn't support it and you find a witness who gives you a piece of information and they have video of their piece that totally refutes what the original belief was as to who the at-fault party was.
00:27:25.045 --> 00:27:42.217
So you find witnesses, you find actual video of either the event as it occurred or the immediate seconds afterwards, because, think about it, somebody sees it, or they hear the crash and immediately the phone goes up.
00:27:42.217 --> 00:27:47.803
So they're really recording the immediate after events of the crash, not the crash itself.
00:27:47.803 --> 00:27:59.561
But that's very helpful, because the other thing the boots on the ground piece would be for the investigator to go out and literally look for cameras in the area.
00:27:59.561 --> 00:28:16.098
I mean, we do that frequently, whether it be public cameras on the sides of buildings, they could be street cameras run by the local public entity, or potentially they're cameras on private residences or businesses that may capture something.
00:28:16.098 --> 00:28:20.201
You knock on the door and tell them what you're doing and maybe they could help.
00:28:20.201 --> 00:28:22.630
Sometimes they do and sometimes they don't and maybe they could help.
00:28:23.613 --> 00:28:24.676
Sometimes they do and sometimes they don't.
00:28:24.676 --> 00:28:25.599
That's a great point.
00:28:25.599 --> 00:28:27.946
That's a great point.
00:28:27.946 --> 00:28:36.601
And it's very rare anymore that, like you said, somebody didn't get a video of it, whether that's a surveillance video that was there for security purposes, or a door cam or somebody's phone.
00:28:36.601 --> 00:28:37.844
That's a great point.
00:28:38.269 --> 00:28:58.871
One of the things I really liked that you said earlier that I want just to circle back on was the importance of I think we talked a little bit about trusting your gut but asking, continuing to ask follow-up questions, and you had mentioned like that example of the adjuster who kind of was following a script it sounded like and then once they finished their script, they were done and they didn't ask additional questions.
00:28:58.990 --> 00:29:16.539
And you know we have a pretty specialized catastrophic team and I can think of one very challenging claim that happened, which was very difficult, and the injured worker story didn't sit right with the adjuster Like something just didn't feel right about it and it was an after work party.
00:29:16.539 --> 00:29:23.462
You know that was a company event, so this wasn't like a normal business workers' compensation accident.
00:29:23.462 --> 00:30:05.440
But as she took the person's statement, it raised some red flags and she got hold of a witness and the witness statement just didn't feel right and so then she kept going and there was another witness that was there that day that she tracked down, and that witness had a completely different story, where the person was under the influence and made some really poor choices and said some things that were pretty bad and actually kind of caused the injury to occur by their actions, clearly became not a work-related injury, but at first blush, if you had just taken the one statement and the friend who was a witness, the claim would have been accepted.
00:30:07.970 --> 00:30:09.231
So when do you see that gap?
00:30:09.231 --> 00:30:16.321
And that's a great example, because you know earlier when I talked about the who, what, when, where, why, how and how much.
00:30:16.321 --> 00:30:35.804
There's also another aspect, and this is why interview training is so important for claim staff, and not just one time, but probably some refresher training every few years as well, because even interviewing evolves.
00:30:35.804 --> 00:30:39.336
But a lot of interviewing is simply common sense.
00:30:39.336 --> 00:30:57.421
So one of the things I like to train folks is, anytime somebody when you're interviewing them, if they introduce a person, place, thing or event in their story, you need to dive down into those things to identify a little bit more information.
00:30:57.421 --> 00:31:00.913
And I'll use this example based on what you were just saying.
00:31:00.913 --> 00:31:17.673
Saying in that example, somebody may talk in their interview and say, yeah, before I went to the party, I had stopped at my brother's house and then when I left there and most I would say most people would not come back who's your brother?
00:31:17.673 --> 00:31:19.336
Where does your brother live?
00:31:19.336 --> 00:31:20.721
What's his address?
00:31:20.721 --> 00:31:27.071
Your brother live, what's his address?
00:31:27.071 --> 00:31:29.337
Because it could be that small detail that later and you later on you go find out you talk to.
00:31:29.337 --> 00:31:30.922
I haven't seen my brother in two weeks.
00:31:30.922 --> 00:31:32.893
I don't know what the heck he's talking about stop.
00:31:32.893 --> 00:31:37.279
So why would he provide information?
00:31:37.279 --> 00:31:38.422
That's not true?
00:31:38.422 --> 00:31:42.155
That doesn't appear to be relevant to our story.
00:31:43.117 --> 00:31:44.883
Now it takes more inquiries.
00:31:44.883 --> 00:31:49.759
Okay, why was that brought up and why might it be relevant?
00:31:49.759 --> 00:31:51.455
So it's when they introduce.
00:31:51.455 --> 00:31:55.614
It could be my friend was in the room and then they left.
00:31:56.497 --> 00:32:02.217
When this occurred, whatever the event was, and a lot of people would never go back.
00:32:02.217 --> 00:32:17.276
They think in their mind well, my friend, the person was not in the room when the event of Casey's Head, my friend left the room and they would never go to find out who is my friend.
00:32:17.276 --> 00:32:23.776
Because that person potentially will have important and relevant information.
00:32:23.776 --> 00:32:39.007
That's material to that claim, because maybe they were there, maybe they weren't, but if they were, maybe they didn't quite leave the room as fast as the other person thought and they actually saw what happened.
00:32:39.007 --> 00:32:48.612
So those are examples of diving down into the person, place, place, thing or event in the story, get more detail.
00:32:49.153 --> 00:32:53.824
It's a lot easier to get it up front than to come back and get it later.
00:32:53.824 --> 00:33:05.597
And with that said and I know this is probably quite a bit about interviewing, but probably one of the last things I made a practice of early on in an interview would be.
00:33:05.597 --> 00:33:12.665
Hey, Greg, I really appreciate your time and you gave me some great information and it's really going to help us make an informed decision.
00:33:12.665 --> 00:33:25.545
More than likely I forgot something, so would it be OK if I reach back out and did a follow up and maybe ask the question that later on I forgot I should have asked?
00:33:25.545 --> 00:33:35.315
I don't think in my career I've ever had anybody tell me no, and so when I do call back, it's not a surprise, it's not a shock.
00:33:35.315 --> 00:33:42.973
They're more at ease and I usually am able to get the additional information I'm looking for without any trouble.
00:33:43.895 --> 00:33:54.721
It's a good point and I think getting the details is so important when we're investigating claims and then knowing when to make that referral to whether that's to a company like you.
00:33:54.721 --> 00:34:03.090
Now, in some cases there needs to be a referral made to the state and I think that can be confusing for adjusters to know every state's different.
00:34:03.090 --> 00:34:22.141
Larry, when do we let the state know that we think, wait a minute, this is, I mean, this is something they need to be notified of reporting requirement when fraud is suspected.
00:34:22.960 --> 00:34:25.001
Most of the state statutes are.
00:34:25.001 --> 00:34:36.507
If you put them all side by side, most of them read very, very similar and the threshold for reporting in most states is reasonable suspicion.
00:34:36.507 --> 00:34:57.719
I like to tell groups when I talk with them hey, there's 20 people in the room If I tell a story on a claim and give the red flags as to why I'm suspicious about this particular claim and either everyone or the majority of people in the room agree, yeah, I'd be suspicious of that too.
00:34:57.719 --> 00:35:02.956
You just met the threshold for reporting in most states.
00:35:02.956 --> 00:35:05.481
You have the state of Wisconsin.
00:35:05.942 --> 00:35:07.003
There's laws a little different.
00:35:07.003 --> 00:35:11.956
It says you must have evidence of fraud to be required to report.
00:35:11.956 --> 00:35:20.039
In the state of Wisconsin it's voluntary to report it if it's a reasonable suspicion, but it's required if there's evidence.
00:35:20.039 --> 00:35:26.157
Again, most states it's just reasonable suspicion and that makes it required.
00:35:26.157 --> 00:35:44.139
And then you have the state of California, whose actual statute still says reasonable suspicion, but they have interpreted their own law to now say there must be evidence of a material misrepresentation.
00:35:44.139 --> 00:35:57.018
So that's the language California uses now is material misrepresentation and evidence of that material misrepresentation and then it's required in the state of California.
00:35:57.760 --> 00:36:11.184
It's unfortunate, you've probably seen it in industry but Illinois just came out and reinterpreted their statute saying there's no mandatory at all to report to the state.
00:36:11.184 --> 00:36:13.958
It's all voluntary if you want to.
00:36:13.958 --> 00:36:16.476
The law didn't change.
00:36:16.476 --> 00:36:26.385
They didn't change the statute, but the Department of Insurance changed their interpretation to now it's totally voluntary in the state of Illinois and it's unfortunate.
00:36:26.385 --> 00:36:41.527
I think there's some industry groups that are trying to make some inroads to the state legislature and some other groups to try to get back to where it's a required action like most other states.
00:36:43.630 --> 00:36:44.072
That can be.
00:36:44.072 --> 00:36:48.014
I mean, and when you make those referrals, how often does the state?
00:36:48.014 --> 00:36:54.440
And I know it's probably different from state to state, but I mean, do you see the state actually take action on very many things?
00:36:54.440 --> 00:37:02.074
Or are there sometimes you know you're doing the steps, you're following the protocol, and then you don't hear back or maybe they don't do something.
00:37:02.074 --> 00:37:06.521
Or have you seen cases where they get involved and they actually start to press charges at a state level?
00:37:08.344 --> 00:37:11.659
They do, and think of it this way.
00:37:11.659 --> 00:37:16.702
You have, of course, hundreds and hundreds and hundreds of insurers out there.
00:37:16.702 --> 00:37:27.215
So you have thousands and thousands of claim staff, underwriting staff, others, but the vast majority of referrals are in fact from claims by far number one.
00:37:27.215 --> 00:37:38.974
Then you've got third-party claims administrators, you've got MGAs, mgus, you've got all these industry people who now have some requirements to report and they do so.
00:37:38.974 --> 00:37:43.440
The states get inundated in many cases with the referrals.
00:37:43.440 --> 00:37:45.521
So the states get inundated in many cases with the referrals.
00:37:45.521 --> 00:37:48.065
So many of these states have created their own databases.
00:37:49.650 --> 00:38:23.536
To me it's reasonable If, all of a sudden, the state gets a referral on Larry from carrier B, from carrier C, all of a sudden five or six different carriers all report Larry involved in a suspect claim involving an injury in the last 90 days, the state's going to go hmm, I think we're going to dig into this one, because now we've got the same Larry at the same address, with the same date of birth, filing an injury claim with six different insurers in 90 days.
00:38:23.536 --> 00:38:27.833
I think that would make all of us go hmm, something's here.
00:38:27.833 --> 00:38:47.411
I'm aware of one state that is just starting a pilot of using some rules-based type technology fraud detection technology to help them with all the data that's coming in from all the different carriers.
00:38:47.411 --> 00:39:03.157
But using some rule-based fraud detection technology to assist them in identifying the cases in which they should actually open a case and assign to one of their investigators Makes perfect sense to me.
00:39:03.157 --> 00:39:15.233
A lot of insurers at my company we use fraud detection technology, the clients and their data and then we see the rule triggers a referral.
00:39:16.014 --> 00:39:18.518
The SIU triages that referral.
00:39:18.518 --> 00:39:24.099
Is this a false positive or is this an actual case that should be investigated?
00:39:24.099 --> 00:39:26.237
And then proceed from there.
00:39:26.237 --> 00:39:35.885
And by doing that triage you start training the model as to what's really a good rule and what's accurate and what kind of rule.
00:39:35.885 --> 00:39:38.518
Maybe the rule needs to be tweaked some.
00:39:38.518 --> 00:39:47.195
Maybe the weights of those rules, maybe the weights of those rules.
00:39:47.195 --> 00:39:52.956
And there's a lot of different tech tools out there in the industry available that are either predictive model or rules-based, and a lot of AI is being generated with it now as well.
00:39:53.818 --> 00:39:54.802
A whole new frontier.
00:39:54.802 --> 00:39:56.429
It's a whole new frontier.
00:39:56.429 --> 00:39:57.710
We started talking about AI.
00:39:58.652 --> 00:39:59.034
It is.
00:39:59.034 --> 00:40:03.681
It changes drastically, almost weekly.
00:40:03.681 --> 00:40:06.085
Is there something new coming out?
00:40:08.273 --> 00:40:08.614
It does, it does.
00:40:08.614 --> 00:40:10.579
My kids are going to grow up in a very different world.
00:40:10.579 --> 00:40:17.463
I know that much Just seeing how that's working Well, larry, I really enjoyed having you on this episode.
00:40:17.463 --> 00:40:24.523
One thing that I've tried to make a habit of is putting good vibes back out in the universe.
00:40:24.523 --> 00:40:43.237
I felt like there's so much negativity, and so one of the things I've focused on in my own personal life is trying to be more grateful, because I think it's easy to forget how wonderful life is, and so one of the things I've been asking each of our guests over the last several years is to share something they're grateful for.
00:40:43.237 --> 00:40:48.001
So it could be anything you want, but something that, to you today, you're grateful for.
00:40:48.670 --> 00:40:53.402
You know, I think everybody would probably have a very common thing, and that is family and friends.
00:40:53.402 --> 00:40:55.434
You know my faith.
00:40:55.434 --> 00:40:58.099
All of those things matter a great deal.
00:40:58.099 --> 00:41:03.132
My most recent thing and I'll use as an example is in February.
00:41:03.132 --> 00:41:08.742
I was fortunate to gather family and friends from all over the country for my mom's 90th birthday.
00:41:09.262 --> 00:41:22.224
That's great Was still living in her own home down in Florida and doing well, yeah, couldn't drive anymore, do any of those things, but she was getting around and playing games on her phone and she'd FaceTime you.
00:41:22.224 --> 00:41:27.623
She was really active with that and she'd FaceTime you, and so she was really active with that and she suddenly passed in March.
00:41:27.623 --> 00:41:40.286
I'm sorry, but by having that experience, with everybody gathered together in February, I was very grateful that that happened.
00:41:40.286 --> 00:41:43.056
That's my most recent thing.
00:41:43.989 --> 00:41:44.753
No, that's wonderful.
00:41:44.753 --> 00:41:46.278
I had the opportunity.
00:41:46.278 --> 00:42:06.463
So before I, ever after I graduated from high school and before I went to college, I spent a couple of years out West on the Navajo reservation as a missionary and my mission president was a huge influence on me as a young as a young man and recently went into hospice and he because he's kind of a he was a tough guy.
00:42:06.463 --> 00:42:18.460
He said I'm going out on my own terms, I'm inviting everybody to a party to say goodbye, and literally from all over, we, we flew out to see him and he has.
00:42:18.460 --> 00:42:19.824
He's still in hospice.
00:42:19.824 --> 00:42:23.315
This was a couple of months ago, but I'm so grateful that we had that opportunity.
00:42:23.315 --> 00:42:30.900
It was like a really awesome reunion and there was so much love there of and it was awesome just to see like this has been 25 years.
00:42:30.900 --> 00:42:38.014
But look at all these people who have kids, grandkids, that have all been impacted by this person and and the kind of life he lived.
00:42:38.014 --> 00:42:39.579
So I love that.
00:42:41.070 --> 00:42:48.735
Greg, you talked earlier with your kids, and I'm fortunate that I have five grandkids and so you'll have those down the road.
00:42:48.735 --> 00:42:49.920
That's right.
00:42:50.570 --> 00:42:56.878
Hopefully not too soon, but yes but hey, grandkids are awesome, Absolutely awesome.
00:42:57.739 --> 00:42:58.260
I can't wait.
00:42:58.260 --> 00:42:59.643
I can't wait.
00:42:59.643 --> 00:43:00.793
I'll never see my wife again.
00:43:00.793 --> 00:43:01.757
I know that.
00:43:01.757 --> 00:43:03.411
So once they come, that'll be that.
00:43:03.411 --> 00:43:04.235
So she'll be like I don't wait, I'll never see my wife again.
00:43:04.235 --> 00:43:04.364
I know that.
00:43:04.364 --> 00:43:04.766
So once they come, that'll be that.
00:43:04.766 --> 00:43:09.018
So she'll be like I don't care if you retire tonight, I'm going to be gone chasing them.
00:43:09.018 --> 00:43:12.159
So well, larry, I've certainly enjoyed meeting with you.
00:43:12.159 --> 00:43:32.894
We will remind our listeners, if you like the episode, to go ahead and get us on your podcast platform, and we'd love it if you give us five star rating and leave some comments and feedback so other people can find this episode and also just remind our listeners to do right, think differently and don't forget to care.
00:43:32.894 --> 00:43:38.300
And we will continue releasing episodes every two weeks, like we have for almost the last five years.
00:43:38.300 --> 00:43:41.831
So we hope you continue to follow and share this with your friends.
00:43:41.831 --> 00:43:43.978
Thanks Larry, thanks Greg.
00:43:44.018 --> 00:43:45.201
Thanks Chris, appreciate it guys.
00:43:45.201 --> 00:43:45.601
Thanks Larry.