Home
Board & Officers
About Us
News & Events
A
...Theft & Fraud
...Awareness

A
...Constitution &
...Bylaws

A
State Statutes
Photo Gallery
Search
Links
Newsletter
2012 Awards
Vendors

User Name:

Password:
Apply For / Renew
Membership


South Carolina Laws & Regulations
Relating to Insurance Fraud

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE

Chapter 43 - INSURANCE AND AGENCIES
Article 1. General Provisions

Any licensed agent who, with the intent to injure, defraud, or deceive any insurance company or applicant for insurance:

for which the application is submitted, or

(2) assists, abets, solicits, or conspires with another to prepare
or make an application for insurance, knowing that the application contains any false or misleading information or omissions concerning any fact or thing material to the underwriting of the insurance for which the applicant is submitted, is guilty of a felony and, upon conviction, must be punished by imprisonment for not more than five years or a fine not to exceed five thousand dollars,
or both.

HISTORY 1988 Act No. 641, € 1

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE

Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 1. General Provisions

38-55-160 False representations in applications

It is unlawful for an agent, physician, or any other person to insure or knowingly cause to be insured or reinstated in membership an infirm or unhealthy person, in an uninsurable condition, with intent to defraud.

A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be fined in the discretion of the court or imprisoned not more than three years.

HISTORY 1987 Act No. 155, € 1; 1993 Act No. 184, € 219

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 1. General Provisions

38-55-170 False claims

A person who knowingly causes to be presented a false claim for payment to an insurer transacting business in this State, to a health maintenance organization transacting business in this State, or to any person, including the State of South Carolina, providing benefits for health care in this State, whether these benefits are administered directly or through a third person, or who knowingly assists, solicits, or conspires with another to present a false claim for payment as described above, is guilty of a:

(1) felony if the amount of the claim is five thousand dollars or more. Upon conviction, the person must be imprisoned not more than ten years or fined not more than five thousand dollars, or both.

(2) felony if the amount of the claim is more than one thousand dollars but less than five thousand dollars. Upon conviction, the person must be fined in the discretion of the court or imprisoned not more than five years, or both.

(3) misdemeanor triable in magistrate's court if the amount of the claim is one thousand dollars or less. Upon conviction, the person must be fined or imprisoned not more than is permitted by law without presentment or indictment by the grand jury.

HISTORY 1987 Act No. 155, € 1; 1989 Act No. 148, € 23; 1993 Act No. 732, € 1; 1993 Act No. 184, € 121.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-510 Omnibus insurance fraud and reporting immunity act.

This article is known and may be cited as the "Omnibus Insurance Fraud and Reporting Immunity Act."

HISTORY 1994 Act No. 497, € 31A.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

39-55-520 Legislative intent

The purpose of this article is to confront aggressively the problem of insurance fraud in South Carolina by facilitating the detection of insurance fraud; to allow reporting of suspected insurance fraud; to grant immunity for reporting suspected insurance fraud; to prescribe penalties for insurance fraud; to require restitutions for victims of insurance fraud; to establish a division within the Office of the Attorney General to prosecute insurance fraud; and to require the investigation of alleged insurance fraud by State Law Enforcement Division.

HISTORY 1994 Act No. 497, € 31A.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-530 Definitions

As used in this article:

(A) "Authorized agency" means any duty constituted criminal investigative department or agency of the United States or of this State; the Department of Insurance; the Department of Revenue and Taxation; the Department of Public Safety; the Workers' Compensation Commission; the State Accident Fund; the Second Injury Fund; the Employment Security Commission; the Department of Consumer Affairs; the Human Affairs Commission; the Department of Health and Environmental Control; the Department of Social Services; the Department of Health and Human Services; the Department of labor, Licensing and Regulation; all other state boards, commissions, and agencies - the Office of the Attorney General of this State; or the prosecuting attorney of any judicial circuit, county, municipality, or political subdivision of this State or of the United States, and their respective employees or personnel acting in their official capacity.

(B) "Insurer" shall have the meaning set forth in ¡ 38-1-20(25) and includes any authorized insurer, self-insurer, reinsurer broker, producer, or agent thereof.

(C) "Person" means any natural person, company, corporation, unincorporated association, partnership, professional corporation, or other legal entity and includes any applicant, policyholder, claimant, medical providers, vocational rehabilitation provider, attorney, agent, insurer fund, or advisory organization.

(D) "False statement and misrepresentation" means a statement or representation made by a person that is false, material, made with the person's knowledge of the falsity of the statement, and made with the intent of obtaining or causing another cto obtain or attempting to obtain or causing another to obtain or attempting to obtain or causing another to obtain an undeserved economic advantage or benefit or made with the intent to deny or cause another to deny any benefit or payment in connection with an insurance transaction and such shall constitute fraud.

(E) "Immune" means that neither a civil action nor a criminal prosecution may arise from any action taken pursuant to this article unless actual malice on the part of the reporting person or gross negligence or reckless disregard for the rights of the reported person is present.

HISTORY 1994 Act No. 497, € 31A; 1996 Act No. 278, € 1, 2, eff. 5-6-96; 1996 Act No. 459, € 59, eff. 6-5-96.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-540 Prohibited acts; restitution

Any person or insurer who makes a false statement or misrepresentation, and any other person knowingly, with an intent to injure, defraud, or deceive, who assists, abets, solicits, or conspires with such a person or insurer to make a statement or misrepresentation, is guilty of a:

(1) misdemeanor, for a first offense violation, if the amount of the economic advantage benefit received is less than one thousand dollars. Upon conviction, the person must be punished by a fine not to exceed five hundred dollars or by imprisonment not to exceed thirty days;

(2) misdemeanor, for a first offense violation, if the amount of the economic advantage benefit received is one thousand dollars or more. Upon conviction, the person must be punished by a fine not to exceed fifty thousand dollars or by imprisonment for a term not to exceed three years, or by both such fine and imprisonment.

(3) felony, for a second or subsequent violation, regardless of the amount of the economic advantage benefit received. Upon conviction, the person must be punished by a fine not to exceed fifty thousand dollars or by imprisonment for a term not to exceed ten years, or by both such fine and imprisonment.

Any person or insurer convicted under this section must be ordered to make full restitution to the victim or victims for any economic advantage or benefit which has been obtained by the person or insurer as a result of that violation.

HISTORY 1994 Act No. 497, € 31A

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-550 Penalties

(A) In addition to any criminal liability, any person who is found by a court of competent jurisdiction to have violated any provision of this article, including ¡ 38-55-170, is subject to a civil penalty for each violation as follows:

(1) for a first offense, a fine not to exceed five thousand dollars;

(2) for a second offense, a fine of not less than five thousand dollars but not to exceed ten thousand dollars;

(3) for a third and subsequent offense, a fine of not less than ten thousand dollars but not to exceed fifteen thousand dollars.

(B) The civil penalty must be paid to the director of the Insurance Fraud Division to be used in accordance with subsection (D) of this section. The court may also award court costs and reasonable attorneys' fees to the director. When requested by the director, the Attorney General may assign one or more deputies attorneys general to assist the bureau in any civil court proceedings against the person.

(C) Nothing in subsections (A) and (B) shall be construed to prohibit the director of the Insurance Fraud division and the person alleged to be guilty of a violation of this article from entering into a written agreement in which the 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 relating to any violation of this article.

(D) All revenues from the civil penalties imposed pursuant to this section must be used to provide funds for the costs of enforcing and administering the provisions of this article.

HISTORY 1995 Act No. 497, € 31A.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-560 Insurance fraud division

(A) There is established in the office of the Attorney General a division to be known as the Insurance Fraud Division, which must prosecute violations of €€ 38-55-540 and related criminal insurance activity. Upon receipt of any claims or allegations of violations of € 38-55-170 and related criminal insurance activity, the Attorney General shall forward the information to the State Law Enforcement Division for investigation.

(B) The Attorney General, upon receipt of any claims or allegations of violations of €€ 38-55-170 and 38-55-540 and related criminal insurance activity, is empowered to:

(1) refer the matter for investigation to the State Law Enforcement Division;

(2) prosecute persons determined to be in violation of €€ 38-55-170 and 38-55-540 and related criminal insurance activity in a court of competent jurisdiction; and

(3) collect fines and restitution ordered by the court. Where considered appropriate, the Attorney General may use the Setoff Debt Collection Act to collect fines and restitution ordered as a result of actions brought pursuant to €€ 38-55-170 and 38-55-540.

(C) The State Law Enforcement Division shall investigate thoroughly all claims or allegations of violations of €€ 38-55-170 and 38-55-540 and related criminal insurance activity received from the Attorney General pursuant to this section.

(D) The Insurance Fraud Division of the Office of Attorney General and the investigative services of the State Law Enforcement Division as provided by this section must be funded by an appropriation of not less than two hundred thousand dollars annually from the general revenues of the State derived from the insurance premium taxes collected by the Department of insurance and/or from fines assessed under €€ 38-55-170 and 38-55-540 which must be deposited in the general revenue fund to the credit of the Office of the Attorney General and the State Law Enforcement Division to offset the costs of this program; provided, that the funds generated from these fines, to be utilized by wither the Office of the Attorney General or the State Law Enforcement Division shall not total more than five hundred thousand dollars. These monies must be shared equally on a fifty-fifty basis by the Office of the Attorney General and the State Law Enforcement Division, and the balance must go to the general fund of the State.

HISTORY 1994 Act No. 497, € 31A.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-570 Notification of division

(A) Any person, insurer, or authorized agency having reason to believe that another has made a false statement or misrepresentation or has knowledge of a suspected false statement or misrepresentation shall, for purposes of reporting and investigation, notify the Insurance Fraud Division of the Office of the Attorney General of the knowledge or belief and prove 'de any additional information within his possession relative thereto.

(B) Upon request by the Insurance Fraud Division, any person, insurer, or authorized agency shall release to the Insurance Fraud Division any or all information relating to any suspected false statement or misrepresentation including, but not limited to:

(1) insurance policy information relevant to the investigation, including any application for such a policy;

(2) policy premium payment records, audits, or other documents which are available;

(3) history of previous claims, payments, fees, commission, service bills, or other documents which are available; and

(4) other information relating to the investigation of the suspected false statement or misrepresentation.

(C) Any authorized agency provided with or obtaining information relating to a suspected false statement or misrepresentation as provided for above may release or provide the information to any other authorized agency. The Department of Insurance, the Department of Revenue and Taxation, and the Department of Public Safety shall report, but not adjudicate, all cases of suspected or reported false statement or misrepresentation to the Insurance Fraud Division of the Office of Attorney General for appropriate investigation or prosecution or both. The Workers' Compensation Commission may refer such cases as provided in € 42-9-440.

(D) Except as otherwise provided by law, any information furnished pursuant to this section is privileged and shall not be part of any public record. Any information or evidence furnished to an authorized agency pursuant to this section is not subject to subpoena or subpoena duces tecum in any civil or criminal proceeding unless, after reasonable notice to any person, insurer, or authorized agency which has an interest in the information and after a subsequent hearing, a court of competent jurisdiction determines that the public interest and any ongoing investigation will not be jeopardized by obedience of the subpoena or subpoena duces tecum. The Department of Insurance may receive and must maintain as confidential any documents or information furnished to it by the National Association of Insurance Commissioners or insurance departments of other states which is classified as confidential by that association or state. The Department of Insurance may share documents or information, including confidential documents or information, with the National Association of Insurance Commissioners or insurance departments of other states, of the association or other state agrees to maintain the same level of confidentiality as is provided under South Carolina law. If the documents or information received by the D3epartment of Insurance from the National Association of Insurance Commissioners or the insurance departments of other states involved allegations of insurance fraud, the documents or information must be forwarded by the Department of Insurance to the Insurance Fraud Division of the Office of the Attorney General.

HISTORY 1994 Act No. 497, € 31A; 1995 Act No. 58, € 6; 1996 Act No. 278, € 3, eff. 5-6-96; 1996 Act No. 459, € 60,
eff. 6-5-96.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-580 Immunity from liability

(A) A person, insurer, or authorized agency, when acting without malice or in good faith, is immune from any liability arising out of filing reports, cooperating with investigations by any authorized agency, or furnishing other information, whether written or oral, and whether in response to a request by an authorized agency or upon their own initiative, concerning any suspected, anticipated, or completed false statement or misrepresentation when such reports or information are provided to or received by any authorized agency.

(B) Nothing herein abrogates or modifies in any way common law or statutory privilege or immunity heretofore enjoyed by any person, insurer, or authorized agency.

(C) Nothing herein limits the liability of any person or insurer who, with malice or in bad faith, makes a report of suspected fraud under the provisions of this article.

(D) In addition to the immunity granted in this section, persons identified as designated employees whose responsibilities include the investigation and disposition of claims relating to suspected fraudulent insurance acts may share information-nation relating to persons suspected of committing fraudulent insurance acts with other designated employees employed by the same or other insurers whose responsibilities include the investigation and disposition of claims relating to fraudulent insurance acts, provided the department has been given written notice of the names and job titles of these designated employees prior to any designated employee sharing information. Unless the designated employees
of the insurer act in bad faith or in reckless disregard for the rights
of any insured, neither the insurer not its designated employees
are civilly liable for libel, slander, or any other relevant tort, and a
civil action does not arise against the insurer or its
designated employees:

(1) for any information related to suspected fraudulent insurance acts are provided to an insurer; or
(2) for information related to suspected fraudulent insurance acts provided to the National Insurance Crime Bureau or the National Association of Insurance Commissioners.

Provided, however, that the qualified immunity against civil liability conferred on any insurer or its designated employees shall be forfeited with respect to the exchange or publication of any defamatory information with third persons not expressly authorized by subsection (D) to share in such information.

HISTORY 1994 Act No. 497, € 31A; 1996 Act No. 278, € 4, eff. 5-6-96.

South Carolina Statutes - Insurance Laws
TITLE 38 - INSURANCE
Chapter 55 - CONDUCT OF INSURANCE BUSINESS
Article 5. Insurance Fraud and Reporting Immunity

38-55-590 Annual reports

The director of the Insurance Fraud Division in the Office of the Attorney General shall annually report to the General Assemble regarding:

(A) the status of matters reported to the division, if not privileged information by law;

(B) the number of allegations or reports received;

(C) the number of matters referred to the State Law Enforcement Division for investigation;

(D) the outcome of all investigations and prosecutions under this article, if not privileged by law;

(E) the total amount of fines levied by the court and paid to or deposited by the division; and

(F) patterns and practices of fraudulent insurance transactions identified in the course of performing its duties. The director shall also periodically report this information to insures transacting business in this State, health maintenance organizations
transacting business in this State, and other persons, including the State of South Carolina, which provide benefits for health care in this State, whether these benefits are administered directly or through
a third person.

HISTORY 1994 Act NO. 497, € 31A.

South Carolina Statutes - Insurance Related Laws
TITLE 16 - CRIMES AND OFFENSES
Chapter 11 - OFFENSES AGAINST PROPERTY
Article 3. Arson and Other Offenses Involving Fire

16-11-130 Arson to defraud insurer

Any person who (a) willfully and with intent to injure or defraud an insurer sets fire to or burns or causes to be burned or (b) aids, counsels, or procures the burning of any goods, wares, merchandise, or other chattels or personal property of any kind, whether the property of himself or another, which is at the time insured by any person against loss or damage by fire is guilty of a felony and, upon conviction, must be imprisoned for not less than one nor more than five years.

HISTORY 1962 Code, € 16-313; 1989 Act No. 148, € 25.