False And Fraudulent Claims - The Insurance Frauds Prevention Act - Insurance - CA

Section § 1871

This section emphasizes that insurance fraud is a significant issue affecting various types of insurance, such as auto, workers' compensation, and health insurance. Insurance fraud leads to higher costs for policyholders, contributes to the high cost of premiums, and creates unfair competition. The law aims to enhance the ability of the insurance commissioner and relevant agencies to investigate and prevent such fraudulent activities.

Auto insurance fraud is notably problematic, especially in urban areas, causing increased premium costs. Workers' compensation fraud not only raises policy costs for employers but also undermines trust in the system. Employers who fraudulently misreport payroll can heavily impact honest businesses and taxpayers. Health insurance fraud similarly escalates healthcare costs unnecessarily.

The Legislature finds and declares as follows:

(a) The business of insurance involves many transactions that have the potential for abuse and illegal activities. There are numerous law enforcement agencies on the state and local levels charged with the responsibility for investigating and prosecuting fraudulent activity. This chapter is intended to permit the full utilization of the expertise of the commissioner and the department so that they may more effectively investigate and discover insurance frauds, halt fraudulent activities, and assist and receive assistance from federal, state, local, and administrative law enforcement agencies in the prosecution of persons who are parties in insurance frauds.

(b) Insurance fraud is a particular problem for automobile policyholders; fraudulent activities account for 15 to 20 percent of all auto insurance payments. Automobile insurance fraud is the biggest and fastest growing segment of insurance fraud and contributes substantially to the high cost of automobile insurance with particular significance in urban areas.

(c) Prevention of automobile insurance fraud will significantly reduce the incidence of severity and automobile insurance claim payments and will therefore produce a commensurate reduction in automobile insurance premiums.

(d) Workers’ compensation fraud harms employers by contributing to the increasingly high cost of workers’ compensation insurance and self-insurance and harms employees by undermining the perceived legitimacy of all workers’ compensation claims.

(e) Prevention of workers’ compensation insurance fraud may reduce the number of workers’ compensation claims and claim payments thereby producing a commensurate reduction in workers’ compensation costs. Prevention of workers’ compensation insurance fraud will assist in restoring confidence and faith in the workers’ compensation system, and will facilitate expedient and full compensation for employees injured at the workplace.

(f) The actions of employers who fraudulently underreport payroll or fail to report payroll for all employees to their insurance company in order to pay a lower workers’ compensation premium result in significant additional premium costs and an unfair burden to honest employers and their employees.

(g) The actions of employers who fraudulently fail to secure the payment of workers’ compensation as required by Section 3700 of the Labor Code harm employees, cause unfair competition for honest employers, and increase costs to taxpayers.

(h) Health insurance fraud is a particular problem for health insurance policyholders. Although there are no precise figures, it is believed that fraudulent activities account for billions of dollars annually in added health care costs nationally. Health care fraud causes losses in premium dollars and increases health care costs unnecessarily.

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Section § 1871.1

This law ensures that insurance companies and their agents can check public records that are required to be accessible when they're looking into possible fraud claims. It emphasizes that they have access to these records as allowed by existing regulations, without providing any new access rights beyond the current law.

Insurers and their agents, while they are investigating suspected fraud claims, shall have access to all relevant public records that are required to be open for inspection under Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code, and any regulations thereunder. This section restates existing law, and the Legislature does not intend to grant insurers or their agents access to public records other than to those public records available to them under existing law.

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Section § 1871.2

This law requires insurance companies to include a clear warning on certain insurance-related forms. The warning informs people that it is a crime to deliberately provide false or fraudulent information to get or change insurance coverage, or to make a claim. Violators can face fines and prison time. This rule must be stated prominently on the forms, preceded by wording that explains it's required by California law.

The requirement does not apply to reinsurance contracts, which are defined separately.

(a) An insurer who, in connection with any insurance application, contract, or provision of contract, prints, reproduces, or furnishes a form to any person upon which that person applies for a policy, seeks to amend insurance coverage, or furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy, or gives notice of a claim to the insurer or makes a claim against the insurer by reason of accident, injury, death, or other noticed or claimed loss, shall cause to be printed or displayed in comparative prominence with other content on the form, exclusive of schedules attached to the form, or an endorsement separate from the form, the statement: “Any person who knowingly presents false or fraudulent information to obtain or amend insurance coverage or to make a claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison.” This statement shall be preceded by the words: “For your protection California law requires the following to appear on this form” or other explanatory words of similar meaning.

(b) This section is not applicable to a contract of reinsurance as defined in Section 620.

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Section § 1871.3

Before settling a claim for a stolen insured vehicle, the insurer must obtain a claim form from the insured, which includes a warning about perjury, a detailed vehicle description, purchase details, and a theft account. The insured must also provide their driver's license number unless the vehicle is owned by a non-individual or covered by a financial institution. The form must be signed under penalty of perjury, either in front of a claims representative or with a notarized signature. Insurers are required to keep records of the settlement checks, claim form, and police report for three years.

(a) In the case of any claim arising from the theft of an insured vehicle, prior to the settlement of the claim, the insurer shall secure from the insured a claim form which shall contain, among other things, the following:

(1) A warning that false representations made on the signed claim form by the insured subject the insured to a penalty of perjury.

(2) A detailed description of the insured vehicle including the interior, exterior, and any special equipment.

(3) The purchase location of the insured vehicle, the purchase date, and the name of the seller.

(4) A detailed statement of the circumstances surrounding the theft.

(5) The current driver’s license number of the insured, except where the vehicle is owned by a person that is not a natural person, or the claimant is a financial institution and the vehicle is insured pursuant to an insurance policy issued to the financial institution to protect vehicles that are collateral securing any loan made by the financial institution. A financial institution shall provide, to the extent it has the information, the current driver’s license number of the registered owner of the vehicle or the debtor who has obtained the loan.

(b) For purposes of complying with the requirements of subdivision (a), the insured shall do either of the following:

(1) Sign the claim form in the presence of the insurance agent, broker, adjuster, or other claims representative, who shall verify the driver’s license number of the insured who is signing the claim form.

(2) Submit a claim form with a notarized signature.

(d) The insurer shall retain the following for at least three years:

(1) All settlement checks in settlement of the theft of an automobile, or an electronic copy thereof.

(2) The original claim form provided for in subdivision (a), or an electronic copy thereof.

(3) A legible copy of the police report of the vehicle theft, or an electronic copy thereof.

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Section § 1871.4

This law makes it illegal to lie or make false statements to either get or deny workers' compensation or benefits from the Return-to-Work Program. It covers false statements in claims, supporting documents, or attempts to discourage others from filing or pursuing claims. Violators can face jail time, heavy fines, and must pay restitution for any services obtained. If someone has past felony convictions under specific related laws, additional jail time is added for each past conviction. The law also allows for other criminal laws to apply where relevant.

(a) It is unlawful to do any of the following:

(1) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.

(2) Present or cause to be presented a knowingly false or fraudulent written or oral material statement in support of, or in opposition to, a claim for compensation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.

(3) Knowingly assist, abet, conspire with, or solicit a person in an unlawful act under this section.

(4) Make or cause to be made a knowingly false or fraudulent statement with regard to entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim.

For the purposes of this subdivision, “statement” includes, but is not limited to, a notice, proof of injury, bill for services, payment for services, hospital or doctor records, X-ray, test results, medical-legal expense as defined in Section 4620 of the Labor Code, other evidence of loss, injury, or expense, or payment.

(5) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.

(6) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of discouraging an employer from claiming any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.

(b) Every person who violates subdivision (a) shall be punished by imprisonment in a county jail for one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code, for two, three, or five years, or by a fine not exceeding one hundred fifty thousand dollars ($150,000) or double the value of the fraud, whichever is greater, or by both that imprisonment and fine. Restitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided. The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid. A person convicted under this section may be charged the costs of investigation at the discretion of the court.

(c) A person who violates subdivision (a) and who has a prior felony conviction of that subdivision, of former Section 556, of former Section 1871.1, or of Section 548 or 550 of the Penal Code, shall receive a two-year enhancement for each prior conviction in addition to the sentence provided in subdivision (b).

The existence of any fact that would subject a person to a penalty enhancement shall be alleged in the information or indictment and either admitted by the defendant in open court, or found to be true by the jury trying the issue of guilt or by the court where guilt is established by plea of guilty or nolo contendere or by trial by the court sitting without a jury.

(d) This section may not be construed to preclude the applicability of any other provision of criminal law that applies or may apply to a transaction.

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Section § 1871.5

If a person is found guilty of committing workers' compensation fraud, they cannot receive or keep any compensation. This applies if the compensation was related to their fraudulent actions.

Any person convicted of workers’ compensation fraud pursuant to Section 1871.4 or Section 550 of the Penal Code shall be ineligible to receive or retain any compensation, as defined in Section 3207 of the Labor Code, where that compensation was owed or received as a result of a violation of Section 1871.4 or Section 550 of the Penal Code for which the recipient of the compensation was convicted.

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Section § 1871.6

This section clarifies that the rules in Section 781 of the Penal Code, which deal with prosecuting crimes, also apply to cases involving violations of Section 1871.4 related to insurance fraud. It's just stating what's already in the law and doesn't restrict Section 781's use in other criminal cases.

The provisions of Section 781 of the Penal Code are applicable to any prosecutions for violations of Section 1871.4. This section is declaratory of existing law and shall not be interpreted to limit the applicability of Section 781 of the Penal Code to any other criminal provisions.

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Section § 1871.7

This law makes it illegal to knowingly hire people to obtain clients for insurance or workers' compensation claims. Those who break this law face civil penalties ranging from $5,000 to $10,000, plus up to three times the amount of any fraudulent claim. Legal actions can be initiated by district attorneys, the insurance commissioner, or any interested party on behalf of the state. The law allows courts to impose further remedies to stop the misuse of funds or protect the public.

People bringing an action can earn a share of any recovered funds, and there are protections against employer retaliation for employees involved in these actions. However, any claims must be filed within a specific time frame, generally not more than eight years after the violation. If both civil and criminal actions are pending for the same conduct, the civil action is paused until the criminal case is resolved. The law encourages fairness in proceedings by allowing the court to limit the participation of parties in certain situations. Additionally, if parties violate the law and have independent knowledge of its violations, they may bring an action unless the details have already been disclosed in public forums.

(a) It is unlawful to knowingly employ runners, cappers, steerers, or other persons to procure clients or patients to perform or obtain services or benefits pursuant to Division 4 (commencing with Section 3200) of the Labor Code or to procure clients or patients to perform or obtain services or benefits under a contract of insurance or that will be the basis for a claim against an insured individual or their insurer.

(b) Every person who violates any provision of this section or Section 549, 550, or 551 of the Penal Code shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000), plus an assessment of not more than three times the amount of each claim for compensation, as defined in Section 3207 of the Labor Code or pursuant to a contract of insurance. The court shall have the power to grant other equitable relief, including temporary injunctive relief, as is necessary to prevent the transfer, concealment, or dissipation of illegal proceeds, or to protect the public. The penalty prescribed in this paragraph shall be assessed for each fraudulent claim presented to an insurance company by a defendant and not for each violation.

(c) The penalties set forth in subdivision (b) are intended to be remedial rather than punitive, and shall not preclude, nor be precluded by, a criminal prosecution for the same conduct. If the court finds, after considering the goals of disgorging unlawful profit, restitution, compensating the state for the costs of investigation and prosecution, and alleviating the social costs of increased insurance rates due to fraud, that such a penalty would be punitive and would preclude, or be precluded by, a criminal prosecution, the court shall reduce that penalty appropriately.

(d) The district attorney or commissioner may bring a civil action under this section. Before the commissioner may bring that action, the commissioner shall be required to present the evidence obtained to the appropriate local district attorney for possible criminal or civil filing. If the district attorney elects not to pursue the matter, then the commissioner may proceed with the action.

(e)

(1) Any interested persons, including an insurer, may bring a civil action for a violation of this section for the person and for the State of California. The action shall be brought in the name of the state. The action may be dismissed only if the court and the district attorney or the commissioner, whichever is participating, give written consent to the dismissal.

(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the district attorney and commissioner. The complaint shall be filed in camera, shall remain under seal for at least 60 days from the date of service on the district attorney and commissioner, and shall not be served on the defendant until the court so orders. The local district attorney or commissioner may elect to intervene and proceed with the action within 60 days after the district attorney or commissioner receives both the complaint and the material evidence and information. If more than one governmental entity elects to intervene, the district attorney shall have precedence.

(3) The district attorney or commissioner may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). The motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 20 days after the complaint is unsealed and served upon the defendant.

(4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the district attorney or commissioner shall either:

(A) Proceed with the action, in which case the action shall be conducted by the district attorney or commissioner.

(B) Notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.

(5) When a person or governmental agency brings an action under this section, no person other than the district attorney or commissioner may intervene or bring a related action based on the facts underlying the pending action unless that action is authorized by another statute or common law.

(f)

(1) If the district attorney or commissioner proceeds with the action, the district attorney or commissioner shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. That person shall have the right to continue as a party to the action, subject to the limitations set forth in paragraph (2).

(2)

(A) The district attorney or commissioner may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the district attorney or commissioner of the filing of the motion, and the court has provided the person with an opportunity for a hearing on the motion.

(B) The district attorney or commissioner may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, the hearing may be held in camera.

(C) Upon a showing by the district attorney or commissioner that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the district attorney’s or commissioner’s prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person’s participation, including, but not limited to, the following:

(i) Limiting the number of witnesses the person may call.

(ii) Limiting the length of the testimony of those witnesses.

(iii) Limiting the person’s cross-examination of witnesses.

(iv) Otherwise limiting the participation by the person in the litigation.

(D) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.

(3) If the district attorney or commissioner elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action. If the district attorney or commissioner so requests, the district attorney or commissioner shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts, at the district attorney’s or commissioner’s expense. When a person proceeds with the action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the district attorney or commissioner to intervene at a later date upon a showing of good cause.

(4) If at any time both a civil action for penalties and equitable relief pursuant to this section and a criminal action are pending against a defendant for substantially the same conduct, whether brought by the government or a private party, the civil action shall be stayed until the criminal action has been concluded at the trial court level. The stay shall not preclude the court from granting or enforcing temporary equitable relief during the pendency of the actions. Whether or not the district attorney or commissioner proceeds with the action, upon a showing by the district attorney or commissioner that certain actions of discovery by the person initiating the action would interfere with a law enforcement or governmental agency investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay discovery for a period of not more than 180 days. A hearing on a request for the stay shall be conducted in camera. The court may extend the 180-day period upon a further showing in camera that the agency has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.

(5) Notwithstanding subdivision (e), the district attorney or commissioner may elect to pursue its claim through any alternate remedy available to the district attorney or commissioner.

(g)

(1) (A) (i) If the district attorney proceeds with an action brought by a person under subdivision (e), that person shall, subject to subparagraph (B), receive at least 30 percent but not more than 40 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.

(ii) If the commissioner has brought an action or has proceeded with an action brought by another person under this section on or after January 1, 2006, the commissioner shall be entitled to attorney’s fees and costs in addition to any judgment, regardless of the date that judgment is entered. The court shall determine and award the commissioner the amount of reasonable attorney’s fees, including, but not limited to, reasonable fees for time expended by attorneys employed by the department and for costs incurred. Any attorney’s fees or costs awarded to the commissioner and collected shall be deposited in the Insurance Fund. In cases in which the commissioner has intervened, the commissioner and the person bringing the claim may stipulate to an allocation. The court may allocate the funds pursuant to the stipulation if, after the court’s ruling on objection by the district attorney, if any, the court finds it is in the interests of justice to follow the stipulation.

(iii) If the commissioner has proceeded with an action, if there is no stipulation regarding allocation, and if a judgment has been obtained or a settlement has been reached with the defendants, the court shall determine the allocation, upon motion of the commissioner or the person bringing the action, according to the following priority:

(I) The person bringing the action, regardless of whether that person paid money to the defendants as part of the acts alleged in the complaint, shall first receive the amount the court determines is reasonable for attorney’s fees, costs, and expenses that the court determines to have been necessarily incurred.

(II) The commissioner shall receive the amount the court determines for reasonable attorney’s fees and costs.

(III) If the person bringing the suit has paid moneys to the defendants as part of the acts alleged in the complaint, that person shall receive the amount paid to the defendants.

(IV) At least 30 percent, but not more than 40 percent, of the remaining assets or moneys, shall be allocated to the person bringing the action, depending upon the extent to which the person substantially contributed to the prosecution of the action.

(iv) Those portions of a judgment or settlement not distributed pursuant to this subdivision shall be paid to the General Fund of the state and, upon appropriation by the Legislature, shall be apportioned between the Department of Justice and the Department of Insurance for enhanced fraud investigation and prevention efforts.

(B) Where the action is one that the court finds to be based primarily on disclosures of specific information, other than information provided by the person bringing the action, relating to allegations or transactions in a criminal, civil, or administrative hearing, in a legislative or administrative report, hearing, audit, or investigation, or from the news media, the court may award those sums that it considers appropriate, but in no case more than 10 percent of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation.

(C) Any payment to a person under subparagraph (A) or under subparagraph (B) shall be made from the proceeds. The person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney’s fees and costs. All of those expenses, fees, and costs shall be awarded against the defendant.

(2)

(A) If the district attorney or commissioner does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount that the court decides is reasonable for collecting the civil penalty and damages. Except as provided in subparagraph (B), the amount shall not be less than 40 percent and not more than 50 percent of the proceeds of the action or settlement and shall be paid out of the proceeds. That person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney’s fees and costs. All of those attorney’s fees and costs shall be imposed against the defendant. The parties shall serve the commissioner and the local district attorney with complete copies of any and all settlement agreements, and terms and conditions, for actions brought under this article at least 10 days prior to filing any motion for allocation with the court under this paragraph. The court may allocate the funds pursuant to the settlement agreement if, after the court’s ruling on objection by the commissioner or the local district attorney, if any, the court finds it is in the interests of justice to follow the settlement agreement.

(B) If the person bringing the action, as a result of a violation of this section has paid money to the defendant or to an attorney acting on behalf of the defendant in the underlying claim, then the person shall be entitled to up to double the amount paid to the defendant or the attorney if that amount is greater than 50 percent of the proceeds. That person shall also receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorney’s fees and costs. All of those expenses, fees, and costs shall be awarded against the defendant.

(3) If a local district attorney has proceeded with an action under this section, one-half of the penalties not awarded to a private party, as well as any costs awarded shall go to the treasurer of the appropriate county. Those funds shall be used to investigate and prosecute fraud, augmenting existing budgets rather than replacing them. All remaining funds shall go to the state and be deposited in the General Fund and, when appropriated by the Legislature, shall be apportioned between the Department of Justice and the Department of Insurance for enhanced fraud investigation and prevention efforts.

(4) Whether or not the district attorney or commissioner proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of this section, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. The dismissal shall not prejudice the right of the district attorney or commissioner to continue the action on behalf of the state.

(5) If the district attorney or commissioner does not proceed with the action, and the person bringing the action conducts the action, the court may award to the defendant its reasonable attorney’s fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

(h)

(1) In no event may a person bring an action under subdivision (e) that is based upon allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the Attorney General, district attorney, or commissioner is already a party.

(2)

(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing in a legislative or administrative report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the district attorney or commissioner before filing an action under this section that is based on the information.

(i) Except as provided in subdivision (j), the district attorney or commissioner is not liable for expenses that a person incurs in bringing an action under this section.

(j) In civil actions brought under this section in which the commissioner or a district attorney is a party, the court shall retain discretion to impose sanctions otherwise allowed by law, including the ability to order a party to pay expenses as provided in Sections 128.5 and 1028.5 of the Code of Civil Procedure.

(k) Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by their employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in, an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. That relief shall include reinstatement with the same seniority status the employee would have had but for the discrimination, two times the amount of backpay, interest on the backpay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees. An employee may bring an action in the appropriate superior court for the relief provided in this subdivision. The remedies under this section are in addition to any other remedies provided by existing law.

(l)

(1) An action pursuant to this section may not be filed more than three years after the discovery of the facts constituting the grounds for commencing the action.

(2) Notwithstanding paragraph (1) no action may be filed pursuant to this section more than eight years after the commission of the act constituting a violation of this section or a violation of Section 549, 550, or 551 of the Penal Code.

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Section § 1871.8

This law requires that any insurer or self-insured employer must give a notice to injured workers, in both English and Spanish, when issuing a check for temporary disability benefits. The notice warns the workers that they must report any income they earn while receiving these benefits to their employer or insurance company before cashing the check. If they fail to do so, they could face legal consequences, including jail, fines, and loss of benefits.

An insurer or self-insured employer shall provide the following notice, in both English and Spanish, to an injured worker on or with a check for temporary disability benefits:

WARNING: You are required to report to your employer or the insurance company any money that you earned for work during the time covered by this check, and before cashing this check. If you do not follow these rules, you may be in violation of the law and the penalty may be jail or prison, a fine, and loss of benefits.

ADVERTENCIA: Es necesario que usted le avise a su patrón o a su compañía de seguro todo dinero que usted ha ganado por trabajar, durante el tiempo cubierto por éste cheque, y antes de cambiar éste cheque. Si usted no sigue estos reglamentos, Usted puede estar en violación de la ley y el castigo podría ser cárcel o prisión, una multa, y pérdida de beneficios.

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Section § 1871.9

This law requires the department to post specific details online for anyone convicted of certain violations related to workers’ compensation insurance. It includes their name, case information, location, conviction date, offense description, amount defrauded, and punishment details. This information will stay on the website for five years unless the conviction is reversed or expunged.

The department shall post all of the following information on its Internet Web site for each person, as defined in Section 19, convicted of a violation of this article, Section 11760 or 11880, Section 3700.5 of the Labor Code, or Section 487 or 550 of the Penal Code, if the violation involved workers’ compensation insurance, services, or benefits:

(a) The name, case number, county or court, and other identifying information with respect to the case.

(b) The full name of the defendant.

(d) The date of conviction.

(e) A description of the offense.

(f) The amount of money alleged to have been defrauded.

(g) A description of the punishment imposed, including the length of any sentence of imprisonment and the amount of any fine imposed.

The information required to be posted under this section shall be maintained on the department’s Web site for a period of five years from the date of conviction or until the department is notified in writing by the person that the conviction has been reversed or expunged.

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Section § 1871.10

This law makes it illegal to lie or make false statements to get or change an insurance policy. If you break this law, you could be fined up to $10,000, jailed for up to one year, or both.

It is unlawful to make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or amending an insurance policy under any line of insurance regulated by the department. A violation of this section is a public offense, punishable by a fine not to exceed ten thousand dollars ($10,000), by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail not to exceed one year, or by both that fine and imprisonment.

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The Insurance Frauds Prevention Act

The Insurance Frauds Prevention ActFalse and Fraudulent Claims