New Books on Insurance Issues from Barry Zalma

“Insurance Fraud – Volume I & Volume II Second Edition”

Insurance Fraud Volume I Second Edition: How Lawyers & Claims People Defeat Insurance Fraud

Insurance fraud continually takes more money each year than it did the last from the insurance buying public. No one knows the actual amount with any certainty because most attempts at insurance fraud succeed. Estimates of the extent of insurance fraud in the United States range from $87 billion to more than $300 billion every year. Insurers and government backed pseudo-insurers can only estimate the extent they lose to fraudulent claims. Lack of sufficient investigation and prosecution of insurance criminals is endemic. Most insurance fraud criminals are not detected. Those that are detected do so because they became greedy, sloppy and unprofessional so that the attempted fraud becomes so obvious it cannot be ignored. No one will ever be able to place an exact number on the amount lost to insurance fraud. Everyone who has looked at the issue knows – whether based on their heart, their gut or empirical fact determined from convictions for the crime of insurance fraud – that the number is enormous. When insurers and governments put on a serious effort to reduce the amount of insurance fraud the number of claims presented to insurers and the pseudo-government-based or funded insurers drops logarithmically. The effort to stop insurance fraud against Medicare and Medicaid has increased in recent years. Insurance Fraud Volume II Second Edition: A Manual for How Lawyers & Claims People Can Defeat Insurance Fraud This book contains appellate decisions regarding insurance fraud from federal and state appellate courts across the country and full text of many insurance fraud statutes. It is available as both a legal research tool and a product to assist insurers, insurance company personnel, independent insurance adjusters, special investigation unit investigators, state fraud investigators and insurance lawyers to become effective persons involved in the attempt to defeat or reduce the effect of insurance fraud.

Volume I of Insurance Fraud includes the following:

Insurance Fraud is Epidemic.
Measuring Insurance Fraud
What is Insurance Fraud?
Arson for profit.
Soft Fraud
Hard Fraud
Insurance Against the Risk of Loss of Real or Personal Property
Liability Insurance
Interpretation of Insurance Contracts
Ethics & The Insurance Fraud Investigation
Fraud by Professionals
First Party Property Fraud
Health Insurance Fraud
Insurance Fraud is a Crime
Fraud Created by Legal Professionals
Fraud in the Acquisition of Insurance
Fraud in the Presentation of a Claim
Investigation of a Claim for Fortuity
Investigating Fraud
Arson for Profit Investigation
Investigation Methods
Evaluation of Medical Records

Available as a Kindle book; Available as a Hardcover; Available as a Paperback

Volume II of Insurance Fraud provides coverage of the issues not covered by Volume I and, together with Volume I becomes a complete manual for how lawyers and claims people can effectively work to deter or defeat insurance fraud.
INSURANCE FRAUD IS EPIDEMIC
The following are covered in this volume including:

The Federal Crime of Insurance Fraud
Insurance Fraud as a State Crime
Insurance Fraud by Insurers
California SIU Regulations
Investigating Insurance Fraud
The Examination Under Oath
The Taking of an Examination Under Oath
The Mutability of Memory
Rescission
Insurance Fraud Statutes
The Tort of Bad Faith and Insurance Fraud
Sample California Rescission Letters
Sample Complaint for Declaratory Relief
Form of Mutual Rescission Agreement
Fom Declaration of Underwriter in Support of Rescission
Insurance Fraud Statutes
Outline of Training for Integral Anti-Fraud Personnel
Form of EUO Demand Letter
EUO Testimony admitting fraud.

Available as a Kindle book; Available as a Hardcover; Available as a Paperback

How The Covenant of Good Faith and Fair Dealing Requires Insurance Professionals to Act Ethically and With Utmost Good Faith and Fair Dealing

by Barry Zalma

Ethics is Essential to the Insurance Professional

Insurance is, by definition, a business of the utmost good faith. This means that both parties to the contract of insurance must act fairly and in good faith to each other and do nothing that will deprive the other of the benefits the contract of insurance promised.

In essence the covenant requires that each party to the contract of insurance treat the other ethically, fairly and in good faith.

Without the covenant of good faith and fair dealing and without the people who work in the insurance industry applying and fulfilling the covenant ethically, insurance is impossible. One cannot act fairly and in good faith without being a person with a well-formed ethical compass.

In Carter v. Boehm S.C. 1 Bl. Burr 1906, 11th May 1766. 593, 3 Lord Mansfield in the British House of Lords stated: “Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing the contrary.”

Insurers, when making a decision to insure or not insure a risk, rely on the information provided to them by the insured. As Lord Mansfield instructed, the insured must provide the information requested honestly and in good faith. Failure to do so is unethical and breaches the covenant of good faith.

The implied covenant explains that no party to a contract of insurance should do anything to deprive the other of the benefits of the contract. By so doing an insurer must keep all the promises made by the policy fairly, promptly and in total accord with the promises made by the policy. Similarly, a person insured must treat the insurer ethically, fairly and in good faith when seeking the insurance.

The implied covenant of good faith and fair dealing imposes obligations not only as to claims by a third party but also as to those claims made by the insured. When the insurer unreasonably, and in bad faith, withholds payment of the claim of its insured, it is subject to liability in tort. For the insurer to fulfill its obligation not to impair the right of the insured to receive the benefits of the agreement, it again must give at least as much consideration to the latter=s interests as it does to its own.

Therefore, since, at the very least 1766, the business of insurance is a business of the utmost good faith. Each party to a contract of insurance must deal with each other ethically. The general duty of good faith and fair dealing incorporated by reference into every policy of insurance requires a complete understanding of ethics and ethical behavior.

In every insurance contract there is an implied covenant of good faith and fair dealing that neither party will do anything which will injure the right of the other to receive the benefits of the agreement. It was the decision of the California Supreme Court in Gruenberg v. Aetna Insurance Co., 9 Cal.3d. 566, 108 Cal. Rptr. 480 (1973) that first stated that the tort of bad faith will apply to first party insurance in the state of California. Gruenberg was adopted in a majority of the states of the United States making the breach of an insurance contract unethically and in bad faith became a tort.

The covenant is mutual and the principles of good faith and fair dealing impose an affirmative obligation on the insured to cooperate as much as it requires the insurer to treat the insured fairly with regard to every claim presented