Mishandling of claims
The insurance company has a duty to try and detect false claims. Although it is impossible to detect every fraudulent claim, if an insurance company bypasses its own claims verification processes, it could be committing fraud.

Failure to pay legitimate claims
Insurance companies are required to pay any legitimate claim that is properly submitted and is absent of fraud. An insurance company might commit fraud when claims are consistently rejected even though the required information has been submitted. Many states have regulations regarding the amount of time an insurance company has to pay a claim.

Charging unapproved rates
Most states regulate or require insurance companies to obtain approval on premiums rates. Fraud can occur when insurance companies may improperly begin charging the rates before they are formally approved.

Requesting rate increase based on fraudulent data
Insurance companies may use fraudulent cost data in order to increase premiums which illegally increases monies coming into the company.

Using illegal or deceptive Sales tactics to sell insurance
Insurance companies may promote or condone deceptive and illegal sales practices in order to increase income from sales. The most common example is to disguise an insurance policy as a savings plan or investment.

Fraud has no boundaries and affects all aspects of insurance; from the injured employee to the insurance carrier we all must be diligent and on alert for fraudulent activities.

Source: Missouri Employers Mutual WorkSAFE Center