Study 4 - Risk & Governance Flashcards
What does “innocent until proven guilty” mean?
A catchphrase used to describe a higher standard of proof
What is a balance of probabilities?
Whether it is more probable than not that an allegation is true
Which of the following is a foundational privacy right that can present legal and reputational risk through fraud management activity?
The right to be free from damaging publicity or public attention
Which privacy principle should never be disclosed outside of the organization that collected the information?
Disclosure of personal information for cases concluded not to be fraud
What is a reservation of rights letter?
A notification by an insurer to an insured that the insurer intends to investigate without
prejudicing its rights or position
What is estoppel?
A principle restraining a party from contradicting its own previous actions if those actions have been reasonably relied on by another party
What is a non-waiver agreement?
A documented and signed agreement between the insurer and the insured
Which of the following is a best practice for insurers when making fraud-related decisions?
The insurer’s governance framework for fraud management should be approved
independent of the fraud management function’s direct leadership.
Which type of privilege protects a lawyer when collecting privileged information to prepare a case for or during litigation?
Litigation privilege
Which type of legal privilege protects the communication between a lawyer and a client?
Solicitor–client privilege
What are the privacy principles for insurance fraud management?
-An insurance fraud management program should document baseline principles and practices relating to privacy (including the collection, use, and disclosure of information) and investigative practices.
-All privacy laws must be obeyed.
-When used during an investigation, surveillance should only be considered in cases determined to be potential fraud, not fraud risk.
-Information that identifies a person or entity should not be retained or stored in any case file, data repository, or technology used for the purpose of future fraud management in circumstances where that information was used in a case of fraud risk that was never analyzed or investigated (or analyzed but not determined to be potential fraud).
-An Internet Protocol (IP) address constitutes personal information. It can identify a host on a specific network or subnet, and thus be vulnerable to attack by hackers.
Describe legal privilege along with its two types. How is legal privilege used in the insurance industry?
-Claiming legal privilege in a legal dispute is a way to resist disclosure of information that could weaken a case or prove advantageous to the opposing party.
-An insurer conducting an investigation will sometimes rely on legal privilege to protect the disclosure of information obtained during an investigation into potential fraud.
-(2) types of legal privilege: solicitor-client & litigation privilege.
How are the categories of policy fraud and falsified claim fraud vulnerable to bad faith? Provide some examples.
-The categories of policy fraud and falsified claim fraud are vulnerable to bad faith because the allegations (and management of them) involve both parties to an insurance contract that are owed utmost good faith. Examples of bad faith in the context of insurance fraud include the
following:
*Unsubstantiated conclusions of fraud
*Actions that are consistent with a premature determination of fraudulent behaviour
*Cancelling or voiding a policy due to suspicion
*Denying a claim based on misrepresented information
*Lack of fairness or unjustifiable delays in conducting a fraud investigation
