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Insurance fraud - 18 Pa. Cons. Stat. § 4117Legal Research Home > Pennsylvania Statutes
§ 4117. Insurance fraud.
(a) Offense defined.--A person commits an offense if the
person does any of the following:
(1) Knowingly and with the intent to defraud a State or
local government agency files, presents or causes to be filed
with or presented to the government agency a document that
contains false, incomplete or misleading information
concerning any fact or thing material to the agency's
determination in approving or disapproving a motor vehicle
insurance rate filing, a motor vehicle insurance transaction
or other motor vehicle insurance action which is required or
filed in response to an agency's request.
(2) Knowingly and with the intent to defraud any insurer
or self-insured, presents or causes to be presented to any
insurer or self-insured any statement forming a part of, or
in support of, a claim that contains any false, incomplete or
misleading information concerning any fact or thing material
to the claim.
(3) Knowingly and with the intent to defraud any insurer
or self-insured, assists, abets, solicits or conspires with
another to prepare or make any statement that is intended to
be presented to any insurer or self-insured in connection
with, or in support of, a claim that contains any false,
incomplete or misleading information concerning any fact or
thing material to the claim, including information which
documents or supports an amount claimed in excess of the
actual loss sustained by the claimant.
(4) Engages in unlicensed agent, broker or unauthorized
insurer activity as defined by the act of May 17, 1921
(P.L.789, No.285), known as The Insurance Department Act of
one thousand nine hundred and twenty-one, knowingly and with
the intent to defraud an insurer, a self-insured or the
public.
(5) Knowingly benefits, directly or indirectly, from the
proceeds derived from a violation of this section due to the
assistance, conspiracy or urging of any person.
(6) Is the owner, administrator or employee of any
health care facility and knowingly allows the use of such
facility by any person in furtherance of a scheme or
conspiracy to violate any of the provisions of this section.
(7) Borrows or uses another person's financial
responsibility or other insurance identification card or
permits his financial responsibility or other insurance
identification card to be used by another, knowingly and with
intent to present a fraudulent claim to an insurer.
(8) If, for pecuniary gain for himself or another, he
directly or indirectly solicits any person to engage, employ
or retain either himself or any other person to manage,
adjust or prosecute any claim or cause of action against any
person for damages for negligence or, for pecuniary gain for
himself or another, directly or indirectly solicits other
persons to bring causes of action to recover damages for
personal injuries or death, provided, however, that this
paragraph shall not apply to any conduct otherwise permitted
by law or by rule of the Supreme Court.
(b) Additional offenses defined.--
(1) A lawyer may not compensate or give anything of
value to a nonlawyer to recommend or secure employment by a
client or as a reward for having made a recommendation
resulting in employment by a client; except that the lawyer
may pay:
(i) the reasonable cost of advertising or written
communication as permitted by the rules of professional
conduct; or
(ii) the usual charges of a not-for-profit lawyer
referral service or other legal service organization.
Upon a conviction of an offense provided for by this
paragraph, the prosecutor shall certify such conviction to
the disciplinary board of the Supreme Court for appropriate
action. Such action may include a suspension or disbarment.
(2) With respect to an insurance benefit or claim
covered by this section, a health care provider may not
compensate or give anything of value to a person to recommend
or secure the provider's service to or employment by a
patient or as a reward for having made a recommendation
resulting in the provider's service to or employment by a
patient; except that the provider may pay the reasonable cost
of advertising or written communication as permitted by rules
of professional conduct. Upon a conviction of an offense
provided for by this paragraph, the prosecutor shall certify
such conviction to the appropriate licensing board in the
Department of State which shall suspend or revoke the health
care provider's license.
(3) A lawyer or health care provider may not compensate
or give anything of value to a person for providing names,
addresses, telephone numbers or other identifying information
of individuals seeking or receiving medical or rehabilitative
care for accident, sickness or disease, except to the extent
a referral and receipt of compensation is permitted under
applicable professional rules of conduct. A person may not
knowingly transmit such referral information to a lawyer or
health care professional for the purpose of receiving
compensation or anything of value. Attempts to circumvent
this paragraph through use of any other person, including,
but not limited to, employees, agents or servants, shall also
be prohibited.
(4) A person may not knowingly and with intent to
defraud any insurance company, self-insured or other person
file an application for insurance containing any false
information or conceal for the purpose of misleading
information concerning any fact material thereto.
(c) Electronic claims submission.--If a claim is made by
means of computer billing tapes or other electronic means, it
shall be a rebuttable presumption that the person knowingly made
the claim if the person has advised the insurer in writing that
claims will be submitted by use of computer billing tapes or
other electronic means.
(d) Grading.--An offense under subsection (a)(1) through (8)
is a felony of the third degree. An offense under subsection (b)
is a misdemeanor of the first degree.
(e) Restitution.--The court may, in addition to any other
sentence authorized by law, sentence a person convicted of
violating this section to make restitution.
(f) Immunity.--An insurer, and any agent, servant or
employee thereof acting in the course and scope of his
employment, shall be immune from civil or criminal liability
arising from the supply or release of written or oral
information to any entity duly authorized to receive such
information by Federal or State law, or by Insurance Department
regulations.
(g) Civil action.--An insurer damaged as a result of a
violation of this section may sue therefor in any court of
competent jurisdiction to recover compensatory damages, which
may include reasonable investigation expenses, costs of suit and
attorney fees. An insurer may recover treble damages if the
court determines that the defendant has engaged in a pattern of
violating this section.
(h) Criminal action.--
(1) The district attorneys of the several counties shall
have authority to investigate and to institute criminal
proceedings for any violation of this section.
(2) In addition to the authority conferred upon the
Attorney General by the act of October 15, 1980 (P.L.950,
No.164), known as the Commonwealth Attorneys Act, the
Attorney General shall have the authority to investigate and
to institute criminal proceedings for any violation of this
section or any series of such violations involving more than
one county of the Commonwealth or involving any county of the
Commonwealth and another state. No person charged with a
violation of this section by the Attorney General shall have
standing to challenge the authority of the Attorney General
to investigate or prosecute the case, and, if any such
challenge is made, the challenge shall be dismissed and no
relief shall be available in the courts of the Commonwealth
to the person making the challenge.
(i) Regulatory and investigative powers additional to those
now existing.--Nothing contained in this section shall be
construed to limit the regulatory or investigative authority of
any department or agency of the Commonwealth whose functions
might relate to persons, enterprises or matters falling within
the scope of this section.
(j) Violations, penalties, etc.--
(1) If a person is found by court of competent
jurisdiction, pursuant to a claim initiated by a prosecuting
authority, to have violated any provision of this section,
the person shall be subject to civil penalties of not more
than $5,000 for the first violation, $10,000 for the second
violation and $15,000 for each subsequent violation. The
penalty shall be paid to the prosecuting authority to be used
to defray the operating expenses of investigating and
prosecuting insurance fraud. The court may also award court
costs and reasonable attorney fees to the prosecuting
authority.
(2) Nothing in this subsection shall be construed to
prohibit a prosecuting authority and the person accused of
violating this section from entering into a written agreement
in which that person does not admit or deny the charges but
consents to payment of the civil penalty. A consent agreement
may not be used in a subsequent civil or criminal proceeding,
but notification thereof shall be made to the licensing
authority if the person is licensed by a licensing authority
of the Commonwealth so that the licensing authority may take
appropriate administrative action. Penalties paid under this
section shall be deposited into the Insurance Fraud
Prevention Trust Fund created under the act of December 28,
1994 (P.L.1414, No.166), known as the Insurance Fraud
Prevention Act.
(3) The imposition of any fine or other remedy under
this section shall not preclude prosecution for a violation
of the criminal laws of this Commonwealth.
(k) Insurance forms and verification of services.--
(1) All applications for insurance and all claim forms
shall contain or have attached thereto the following notice:
Any person who knowingly and with intent to defraud
any insurance company or other person files an
application for insurance or statement of claim
containing any materially false information or
conceals for the purpose of misleading, information
concerning any fact material thereto commits a
fraudulent insurance act, which is a crime and
subjects such person to criminal and civil penalties.
(2) (Repealed).
(l) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection:
"Insurance policy." A document setting forth the terms and
conditions of a contract of insurance or agreement for the
coverage of health or hospital services.
"Insurer." A company, association or exchange defined by
section 101 of the act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921; an unincorporated
association of underwriting members; a hospital plan
corporation; a professional health services plan corporation; a
health maintenance organization; a fraternal benefit society;
and a self-insured health care entity under the act of October
15, 1975 (P.L.390, No.111), known as the Health Care Services
Malpractice Act.
"Person." An individual, corporation, partnership,
association, joint-stock company, trust or unincorporated
organization. The term includes any individual, corporation,
association, partnership, reciprocal exchange, interinsurer,
Lloyd's insurer, fraternal benefit society, beneficial
association and any other legal entity engaged or proposing to
become engaged, either directly or indirectly, in the business
of insurance, including agents, brokers, adjusters and health
care plans as defined in 40 Pa.C.S. Chs. 61 (relating to
hospital plan corporations), 63 (relating to professional health
services plan corporations), 65 (relating to fraternal benefit
societies) and 67 (relating to beneficial societies) and the act
of December 29, 1972 (P.L.1701, No.364), known as the Health
Maintenance Organization Act. For purposes of this section,
health care plans, fraternal benefit societies and beneficial
societies shall be deemed to be engaged in the business of
insurance.
"Self-insured." Any person who is self-insured for any risk
by reason of any filing, qualification process, approval or
exception granted, certified or ordered by any department or
agency of the Commonwealth.
"Statement." Any oral or written presentation or other
evidence of loss, injury or expense, including, but not limited
to, any notice, statement, proof of loss, bill of lading,
receipt for payment, invoice, account, estimate of property
damages, bill for services, diagnosis, prescription, hospital or
doctor records, X-ray, test result or computer-generated
documents.
(Feb. 7, 1990, P.L.11, No.6, eff. 60 days; Dec. 19, 1990,
P.L.1451, No.219, eff. imd.; Dec. 28, 1994, P.L.1408, No.165,
eff. 60 days; July 6, 1995, P.L.242, No.28, eff. 60 days)
1995 Repeal Note. Act 28 repealed subsec. (k)(2).
References in Text. Chapter 65 of Title 40 (Insurance),
referred to in this section, is repealed. The subject matter is
now contained in the act of December 14, 1992, P.L.835, No.134,
known as the Fraternal Benefit Societies Code.
The act of December 28, 1994 (P.L.1414, No.166), known as the
Insurance Fraud Protection Act, referred to in subsec. (j)(2)
was repealed by the act of December 6, 2002, P.L.1183, No.147.
The subject matter is now contained in Article XI of the act of
May 17, 1921 (P.L.682, No.284), known as The Insurance Company
Law of 1921.
Cross References. Section 4117 is referred to in sections
911, 5708 of this title; section 5552 of Title 42 (Judiciary and
Judicial Procedure).
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