Must every insurer admitted to do business maintain a unit to investigate potential fraudulent claims?

Every insurer admitted to do business is required to maintain a unit dedicated to the investigation of potential fraudulent claims to ensure the integrity of the insurance process and protect the interests of policyholders. This requirement is essential because fraudulent claims can lead to increased costs for the insurer, affecting prices across the board and ultimately harming consumers.

By having a dedicated unit, insurers can systematically investigate claims that appear suspicious and take appropriate actions, ranging from denying fraudulent claims to reporting criminal activity to law enforcement. This focus on fraud detection helps maintain fair insurance practices, promotes trust in the insurance system, and helps mitigate the financial impacts of fraud on legitimate claims. Therefore, having a specialized unit is not just beneficial but a significant regulatory requirement in the insurance industry.