N.Y. Comp. Codes R. & Regs. tit. 11, § 86.6 – Fraud prevention plans and special investigation units.

(a) Every insurer writing private or commercial automobile insurance, workers' compensation insurance, or individual, group or blanket accident and health insurance policies issued or issued for delivery in this State, which writes 3,000 or more of such policies in any given year, and every entity licensed pursuant to article 44 of the Public Health Law, except those entities with an enrolled population of less than 60,000 persons in the aggregate and except those entities certified pursuant to sections 4403-a, 4403-c, 4403-d, 4403-f and 4408-a of the Public Health Law, shall develop and file with the superintendent a plan for the detection, investigation and prevention of fraudulent insurance activities in this State and those fraudulent insurance activities affecting policies issued or issued for delivery in this State. Notwithstanding the foregoing, insurers writing only reinsurance contracts shall not be required to comply with the provisions of this section.
(b) The plan shall include the following provisions:
1. (1) establishment of a full-time Special Investigations Unit separate from the underwriting or claims functions of the insurer, which shall be responsible for investigation of cases of suspected fraudulent activity and for implementation of the insurer’s fraud prevention and reduction activities under the Fraud Prevention Plan. In the alternative the insurer may contract with a provider of services to perform all or part of this function, but shall remain primarily responsible for the development and implementation of its Fraud Prevention Plan. The agreement under which such services are provided shall be filed with the department’s Criminal Investigations Unit as part of the fraud prevention plan, and must provide for specified levels of staffing devoted to the investigation of suspected fraudulent claims. In the event that investigators employed by a provider of services will be working for more than one insurer or on cases in states other than New York, the plan must apportion the percentage of the investigator's efforts which will be devoted to working for the insurer on its New York cases. The agreement shall also require that the provider of services cooperate fully with the Department of Financial Services in any examination of the implementation of the Fraud Prevention Plan, and provide any and all assistance requested by the Criminal Investigations Unit, any other law enforcement agency or any prosecutorial agency in the investigation and prosecution of insurance fraud and related crimes;
2. (2) a description of the organization of the Special Investigations Unit, including the titles and job descriptions of the various investigators and investigative supervisors, the minimum qualifications for employment in these positions in addition to those required by this regulation, the geographical location and assigned territory of each investigator and investigative supervisor, the support staff and other physical resources, including database access available to the unit and the supervisory and reporting structure within the unit and between the unit and the general management of the insurer. If investigators employed by the unit will be responsible for investigating cases in more than one state, the plan must apportion that percentage of the investigators’ efforts which will be devoted to New York cases;
3. (3) the rationale for the level of staffing and resources being provided for the Special Investigations Unit which may include, but is not limited to the following objective criteria such as number of policies written and individuals insured in New York, number of claims received with respect to New York insureds on an annual basis, volume of suspected fraudulent New York claims currently being detected, other factors relating to the vulnerability of the insurer to fraud, and an assessment of optimal caseload which can be handled by an investigator on an annual basis;
4. (4) a description of the relationship between the Special Investigations Unit and the claims and underwriting functions of the insurer, including procedures for detecting possible fraud, criteria for referral of a case to the unit for evaluation, and the designation of the individuals authorized to make such a referral; and a description of the relationship between the unit and the Criminal Investigations Unit, other law enforcement agencies and prosecutors, including procedures for case investigation, detection of patterns of repetitive fraud involving one or more insurers, criteria for referral of a case to the Criminal Investigations Unit, designation of the individuals authorized to make such referrals, and a policy to avoid duplication of effort due to concurrent referrals by the unit to more than one law enforcement agency;
5. (5) provision for the reporting of fraud data to a data collection firm to be designated by the superintendent;
6. (6) provision for in-service training programs for investigative, underwriting and claims personnel in identifying and evaluating instances of suspected insurance fraud, including an introductory training session and periodic refresher sessions. This description shall include course descriptions, the approximate number of hours to be devoted to these sessions and their frequency;
7. (7) provision for coordination with other units of the insurer to further fraud investigations, including a periodic review of claims and underwriting procedures and forms for the purpose of enhancing the ability of the insurer to detect fraud and to increase the likelihood of its successful prosecution, and for initiation of civil actions where appropriate;
8. (8) development of a public awareness program focused on the cost and frequency of insurance fraud, and methods by which the public can prevent it;
9. (9) development of a fraud detection and procedures manual for use by underwriting, claims and investigative personnel; and
10. (10) timetable for the implementation of the fraud prevention plan, provided however, that the period of implementation shall not exceed six months from the date the plan is approved.
(c) Persons employed by Special Investigations Units as investigators or by an independent provider of investigative services under contract with an insurer shall be qualified by education and/or experience which shall include:
1. (1) an associate's or bachelor's degree in criminal justice or a related field;
2. (2) five years of insurance claims investigation experience or professional investigation experience with law enforcement agencies;
3. (3) seven years of professional investigation experience involving economic or insurance related matters; or
4. (4) an authorized medical professional to evaluate medical related claims.
  Notwithstanding these minimum requirements anyone employed as an investigator in a special investigation unit or by a provider of investigative services under contract to an insurer as of the effective date of this amendment and who was also so employed on or before September 10, 1996 may continue in such employment provided the insurer identifies such person in writing to the superintendent giving the date such employment began and a description of the person’s qualifications, employment history and current job duties.
(d) Every insurer required to file a fraud prevention plan shall file an annual report with the department’s Criminal Investigations Unit no later than January 15th of each year on a form approved by the superintendent, describing the insurer’s experience, performance and cost effectiveness in implementing the plan and its proposals for modifications to the plan to amend its operations, to improve performance or to remedy observed deficiencies. The report shall be reviewed and signed by an executive officer of the insurer responsible for the operations of the Special Investigations Unit.