In this subtitle the following words have the meanings indicated. “Fraud Division” means the Insurance Fraud Division in the Administration. “Insurance fraud” means: a violation of Subtitle 4 of this title; theft, as set out in §§ 7–101 through 7–104 of the Criminal Law Article: from a person regulated under this article; or by a person regulated under this article or an officer, director, agent, or employee of a person regulated under this article; a violation of § 9–1106 of the Labor and Employment Article; or any other fraudulent activity that is committed by or against a person regulated under this article and is a violation of: Title 1, Subtitle 3 of the Agriculture Article; Title 19, Subtitle 2 or Subtitle 3 of the Business Regulation Article; Title 14, Subtitle 29, § 11–810 or § 14–1317 of the Commercial Law Article; the Criminal Law Article other than Title 8, Subtitle 2, Part II or § 10–614; Title 12, Subtitle 9 of the Financial Institutions Article; § 14–127 of the Real Property Article; § 6–301 of the Alcoholic Beverages and Cannabis Article; § 109 of the Code of Public Local Laws of Caroline County; § 4–103 of the Code of Public Local Laws of Carroll County; or § 8A–1 of the Code of Public Local Laws of Talbot County.

An authorized insurer, its employees, fund producers, insurance producers, a viatical settlement provider, or a viatical settlement broker who in good faith has cause to believe that insurance fraud has been or is being committed shall report the suspected insurance fraud in writing to the Commissioner, the Fraud Division, or the appropriate federal, State, or local law enforcement authorities. An independent insurance producer shall meet the reporting requirement of this subsection by reporting the suspected insurance fraud in writing to the Fraud Division. A registered premium finance company shall meet the requirement of this subsection by reporting suspected insurance fraud in writing to the Fraud Division. A governmental self–insurance group formed in accordance with § 9–404 of the Labor and Employment Article or an employer who self–insures or participates in a self–insurance group in accordance with § 9–405 of the Labor and Employment Article shall meet the reporting requirement of this subsection by reporting suspected insurance fraud in writing to the Fraud Division. In addition to any protection provided under Title 4, Subtitle 4, Part IV of the General Provisions Article, any information, documentation, or other evidence provided under this section by an insurer, its employees, fund producers, or insurance producers, a viatical settlement provider, a viatical settlement broker, an independent insurance producer, a registered premium finance company, a governmental self–insurance group, or an employer who self–insures or participates in a self–insurance group to the Commissioner, the Fraud Division, or a federal, State, or local law enforcement authority in connection with an investigation of suspected insurance fraud is not subject to public inspection for as long as the Commissioner, Fraud Division, or law enforcement authority considers the withholding to be necessary to complete an investigation of the suspected fraud or to protect the person investigated from unwarranted injury. A person is not subject to civil liability for a cause of action by virtue of reporting suspected insurance fraud, or furnishing or receiving information relating to suspected, anticipated, or completed fraudulent insurance acts, if: the report was made, or the information was furnished to or received from: the Commissioner, Fraud Division, or an appropriate federal, State, or local law enforcement authority; the National Association of Insurance Commissioners or its agent, employee, or designee; a nonprofit organization established to detect and prevent fraudulent insurance acts or its agent, employee, or designee; a person that contracts to provide special investigative unit services to an insurer; or a provider of a recognized comprehensive database system that the Commissioner approves to monitor activities involving insurance fraud or an employee of the provider; and the person that reported the suspected insurance fraud, or furnished or received the information, acted in good faith when making the report or furnishing or receiving the information.

Each authorized insurer that has in force policies or certificates of insurance in the State shall institute and maintain an insurance antifraud plan. Within 30 days after instituting or modifying an antifraud plan, the authorized insurer shall notify the Commissioner in writing. Each antifraud plan shall establish specific procedures to: prevent insurance fraud, including: internal fraud that involves the authorized insurer’s employees or insurance producers; fraud that results from misrepresentations on insurance applications; and claims fraud; report insurance fraud to appropriate law enforcement authorities; cooperate with the prosecution of insurance fraud cases; and report fraud–related data to the Commissioner and Fraud Division. Each authorized insurer that has in force policies or certificates of insurance in the State shall file its antifraud plan with the Commissioner. The Commissioner may review each antifraud plan to determine whether it complies with the requirements of this section. An antifraud plan is deemed approved unless disapproved by the Commissioner within 30 days after the date of filing. If the Commissioner finds that an antifraud plan does not comply with the requirements of this section, the Commissioner shall disapprove the antifraud plan and send a notice of disapproval, including the reasons for disapproval, to the authorized insurer. If the Commissioner disapproves an antifraud plan, the authorized insurer shall submit a new antifraud plan to the Commissioner within 60 days after the date of disapproval. During an examination under § 2–205 of this article, the Commissioner shall examine the authorized insurer’s procedures to determine whether the authorized insurer is complying with its antifraud plan. The Commissioner may withhold from public inspection any part of an antifraud plan for as long as the Commissioner considers the withholding to be in the public interest. As part of an antifraud plan, an authorized insurer may require in writing that an individual who is receiving benefits under a disability insurance policy must affirm on a periodic basis that the individual: remains entitled to the benefits; and has had no change in the condition entitling the individual to the benefits. An authorized insurer that requires the affirmation permitted under paragraph (1) of this subsection shall disclose to the individual who is receiving benefits that if the individual knowingly and willfully provides false information or knowingly and willfully fails to provide material information in connection with the individual’s eligibility or continued eligibility for benefits under a disability insurance policy, the individual is guilty of a crime and may be subject to a fine and imprisonment. The Commissioner shall adopt regulations that establish minimum standards for antifraud plans required to be filed under this section. It is a violation of this subtitle if the Commissioner finds that an authorized insurer that has in force policies or certificates of insurance in the State has failed to: file an antifraud plan; file a revised antifraud plan after disapproval by the Commissioner of the initial antifraud plan; or comply with the antifraud plan filed by the authorized insurer.

Each viatical settlement provider shall have in place an antifraud plan reasonably calculated to detect, prosecute, and prevent fraudulent viatical settlement acts. Within 30 days after instituting or modifying an antifraud plan, the viatical settlement provider shall notify the Commissioner in writing. Each antifraud plan shall include: the use of fraud investigators; a description of the procedures for detecting and investigating possible fraudulent viatical settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications; a description of the procedures for reporting possible fraudulent viatical settlement acts to the Commissioner; a description of the plan for antifraud education and training of underwriters, and other personnel; and a description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent viatical settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications. An antifraud plan submitted to the Commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action. Each viatical settlement provider shall file its antifraud plan with the Commissioner. The Commissioner may review each antifraud plan to determine whether it complies with the requirements of this section. An antifraud plan is deemed approved unless disapproved by the Commissioner within 30 days after the date of filing. If the Commissioner finds that an antifraud plan does not comply with the requirements of this section, the Commissioner shall disapprove the antifraud plan and send a notice of disapproval, including the reasons for disapproval, to the viatical settlement provider. If the Commissioner disapproves an antifraud plan, the viatical settlement provider shall submit a new antifraud plan to the Commissioner within 60 days after the date of disapproval. It is a violation of this subtitle if the Commissioner finds that a viatical settlement provider has failed to: file an antifraud plan; file a revised antifraud plan after disapproval by the Commissioner of the initial antifraud plan; or comply with the antifraud plan filed by the viatical settlement provider.

In this section, “claim form” means any document supplied by an insurer to a claimant that a claimant is required to complete and submit in support of a claim for benefits. Except as provided in subsection (c) of this section, all applications for insurance and all claim forms, regardless of the form of transmission, shall contain the following statement or a substantially similar statement: “Any person who knowingly or willfully presents a false or fraudulent claim for payment of a loss or benefit or who knowingly or willfully presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.” The lack of the statement required by paragraph (1) of this subsection does not constitute a defense in any legal proceeding. Subsection (b)(1) of this section does not apply to: reinsurance applications or claim forms; or the uniform claims form for reimbursement of hospital services or the uniform claims form for reimbursement of health care practitioners services adopted by the Commissioner under § 15–1003 of this article.

The penalty for a violation of this subtitle is as provided in §§ 4–113 and 4–114 of this article.