Linda Webb speaks at the 2013 NSIPA & IAASE Annual Seminar
Learn how the SWARM MODEL can revolutionize and identify cost containment areas in the insurance industry. Working in conjunction with SIU, Premium Audit and Loss Control in an interactive solution during the whole insurance process. Learn how the integrated team approach can help all insurance field staff work together like, i.e. premium auditors, SIU investigators and loss constrol specialist. Activate the SWARM Model today for game-changing solutions.
Objectives:
Learn how to activate the SWARM MODEL to help your organization.
SIU how it works in conjunction with Loss Control and Premium Audit.
Fraud investigative techniques to help with premium audit.
Identifying deceptive cues during interviews.
Power Point Presentation created by Randy Friedman
6. Corporate Greed – Top Down
Silo Management within Corporation
Lack of Risk Controls
Fear of Losing your Job
People got desperate for Money
7. Intercompany dept. reductions: Training, HR, Safety and
Risk Management reduced in size
Employee devaluation: No value on employee’s worth.
Increased internal fraud: Employees lack“skin-in-the-game”
Higher deductibles on health insurance: Or no health
insurance offered. Employees turn to workers’ compensation.
Reduced full time employees: Part-time means employees no
vacation time. Employee might use workers’ comp as vacation.
8. Opportunist vs. Habitual Criminal
Organized crime rings get into companies too.
- Know who you’re hiring
- Due diligence is important
Identify the “fraudster” in your industry
- Stay connected - who are the organized crime
rings?
9. Open risk holes (vulnerability points) can
happen anytime
Evaluate internal controls for potential
weakness
Understand business process flow –front to
back
Open communication
Stronger Emphasis on Ethics and Integrity
10. Worker’s Compensation Fraud – Under reporting payroll and paying
employees in cash (avoid paying taxes and insurance premiums.)
Changing ownership / starting under new name - Lower premiums.
New businesses with little substantiated business history (due diligence).
Employees don’t report injuries - They need the job, so they continue
to work injured, causing more permanent injury later.
Organized crime rings – Offer money to workers for workers
compensation fraud. Labor brokering. (Shell Companies)
Lower paying jobs go to illegals – Companies bid on jobs at lower
rate. Illegals are pushed to do unsafe jobs.
3rd
generation workers compensation fraud – “learned behavior”
handed down by generations in the family.
12. Typically involves:
1. The creation of shell company (new business)
2. Fake owners
3. Check cashing stores
4. Use of illegal workers
5. Multiple people involved in the scam (an agent,
GC, Foreman, Runners)
13. Bidding System – Construction Industry
1.Very competitive market
2.Jobs go out for bid – lowest gets the job
3.Cost of Materials don’t change - unless stolen
4.Lower wages - below minimum wage
5.Pay cash to workers
14. Form a shell company
Hire undocumented workers
Pay workers in cash
Don’t pay unemployment tax to the State of Florida
Don’t pay insurance premiums – workers’
compensation
15. 1. Facilitator: Recruits individual or “nominee
owner” to incorporate the company online with the
Division of Corporations website.
**Holds the COI – for uninsured subcontractors
2. Agent / Broker: Gives shell company a w/c
insurance policy (adding people as workers on the
policy)
16. 3. Labor Brokers: Modern day slave laborers.
Have a group of people to take to jobsites - (10
to 400 people)
4. Runners: Pick up and take workers to
jobsites
17. General Contractor: at the job site
COI – Certificate of Insurance
6. Foremen: Supervisor at the job site
7. Money Handler: Brings the “cash” on
payday for workers – or runs through check
cashing store
18. GC hold COI for shell company
Uninsured subcontractor works for shell company
GC gets a piece of the payroll from every
undocumented worker
Workers don’t know who they work for
Common for 7 - 20 crews working under the same
shell company name in various locations
throughout the state
19. Facilitator will have Pay Day transaction at the
check cashing store, making workers sometimes
go to that place to get paid under the “shell”
company.
Kickbacks are paid to all “players” in scam (agent,
runners, GC, foreman, etc.)
20. 1. Facilitator uses fake name or person who
is out-of-the-country. Makes owner of shell
company impossible to find.
2. Subcontractors of shell companies not
recorded so you won’t find their payroll.
3. Cost of Materials used – doesn‘t match the
labor to install the materials.
21. New Venture
Location for business is a house or mailbox drop
Likes to use initials in the name of the company
Use INC. vs. LLC
Use name of company like “construction” or “contractors”
Premium less $10k
Less than 10 employees
Agents – No loss letters and resumes of owners identical
DOB and SS# of owners not on Accord
Agent did not secure copies of Identification
Agent didn't’t keep records of COI’s issued
Similar Hyphenated names
Often cancels and reinstates
22. If it looks like a duck
and sounds like a duck…
chances are it’s a duck!
25. The SWARM – All hands on deck beginning of claim “sense of urgency”
Integrated Team Approach – No silo’s, all departments free flow of
information. (Including loss control and premium audit interaction)
Team of experts - beginning of claim all help set up claim properly
Move rapidly after initial assessment
Identify Subrogation, Mitigation, Compensability, and critical evidence
Set reserves appropriately
Human factor – injured workers and family
Proper medical care to the injured worker
Closes the claim faster – Shorter legacy time
Lowered Combined ratio – 98.4%, with industry standard being 115%
Always evaluating “process flow”
Secret Sauce – The SWARMSecret Sauce – The SWARM
26. Loss Control
Review injury and illness prevention plan (IIPP)
Safety Program Audit
Preventative loss analysis and improvement plan
Specific Consulting on loss consulting compliance and
regulatory safety issues (training)
SIU
Due Diligence completed on insured, OSHA violations
Claims Investigations
Was there any on-site video taken or pictures that might help
auditor?
27. Our Risk Improvement Plan include but not limited to:
Contego’s SWARM - integrated team response to cost containment
Rapid response – 60% fewer open claims and reduced claims cost
Safety Incentive Programs – “NASCAR Ready”
Enterprise Risk Analysis - customized training modules for company and
guidance on MVR Standards
Risk Incentive Programs - “wellness component” - ergonomic operations
On-Site Loss Control Inspections - Preventative Loss Analysis &
Improvement
Compliance Assistance & Regulatory Safety Training
Review Injury and Illness Prevention Plan (IIPP)
28. Establish stronger business relationships - Pay attention who your
doing business with
Improve vendor controls - vendor performance management, and
vendor best practices (Obtaining Certificates of Insurance)
Evaluate internal controls - outside consultants – Second set of eyes.
Two-step process – money controls
Network in your industry - who is targeting your industry
Risk Steering Committee - involve all departments – (HR, Legal,
Compliance, Risk Management, Internal Audit)
Open Risk Impressions – employee can submit – open door policy
Tighten hiring practices
29. Better pre-employment - background checks, Social Media checks
Let employees be part of the solution – “skin-in-the-game”
Integrated Team Approach – No Silo Management
Understand the business process - look at all your vulnerability points
Reward top performers
Encourage health and wellness
Have open door - reporting injuries, fraud, and waste
Managers assessable to employees – open door
Fraud poster break rooms – Emphasis on INTEGRITY - fraud hotline
Safety programs - encourage all employees to have “eyes of safety”
Offer Safety Incentive Programs
30. Safe to report injuries
Encourage open reporting - onset of injury (delays cost large dollars)
Return to Work Program – help them get back to work
Regular safety meetings - ask for employee input
Fraud and waste talks – how each employee can help
Employee recognition - Big Idea Program
Open communication talks - dis-spell employee fears
Defined goals - accountability standards with performance incentives
31. Initial Assessment
Fraud Compliance Course
Test and Certification of Completion
Compliance Manual
Employment Protocols: (code of ethics and background checks)
24-Hour Fraud Hotline Service
Posters and other Fraud Related Material
Annual Compliance Audit
Certification of Compliance Integrity
32. SIU and Fraud investigation
Investigative services
SWARM-Link™ and SWARM-Net™
Contego Due Diligence Verification System
Subrogation recovery
Loss Control and Safety
Transportation and Translation
Medical Fraud Waste Abuse
Legal Bill Review – Legal Support Services
34. SIU and Subrogation - daily FROI reviews
CAT Claims - immediate “triaging” from SIU to dispatch, Activate
expert field investigators (360 degree video)
Immediate review process – mitigate, investigate, subrogate
400 years of experience
Includes Loss Control, and Premium Audit
Action plan analysis - as information comes in. Includes Loss Control
and Premium Audit Input
Proven track record (5+ years) - Help claims departments close claims
the quickest amongst competitors.
Proven results - lower the insurance company’s combined ratio Beating
the industry standard