California 3 Hour Ethics Review w/ Anti-Fraud

This course meets California’s three-hour Ethics and Anti-Fraud continuing education requirement. It covers all state-mandated topics, focusing on ethics in the insurance industry and anti-fraud efforts. Topics include ethical principles, fiduciary duties, misrepresentation, unfair practices, confidentiality, legal standards, and real-world ethical situations. It also reviews advertising, commissions, prohibited conduct, and professional codes of ethics (NAIFA and CPCU). The course explores insurance fraud in detail, including the role of the Fraud Division, Penal Code sections, common fraud types, case studies, insurer responsibilities, SIU compliance, fraud detection tools, and cooperation with law enforcement. 

The course will take an in-depth look at a number of issues surrounding ethics and the producer, beginning with an examination of trust in the industry and whether clients actually trust insurance producers compared to other professions. It continues with a comparison of ethics versus morality. Corporate ethical behaviors are also scrutinized.  Ethical concepts and terms will be explored, and the legal ramifications associated with poor ethical choices will be considered. As an important part of ethical compliance, we will also delve into unethical and unfair trade and claims practices, which have been heavily regulated by the state insurance divisions to protect clients and others.  

The final section of the course concentrates on anti-fraud concerns in California, and will explore significant and important topics related to anti-fraud laws and regulations, efforts to combat fraud, what is considered fraud, best practices in the industry, and much more.  

Topics included in this course are:  

• What ethics are and are not.  
• Accountability and related practices for the producer.  
• Legal concepts, including the basic concept of ethics, legality, expectations of professionalism and expertise of the producer, illegal and unethical inducements, misrepresentations, and suitability of purchase.  
• Ethics for a successful business, with examples that illustrate sound ethical practices.  
• Contractual ethical duties compared to service-oriented duties to the client.  
• Fiduciary responsibilities and a discussion of whether a producer is a fiduciary.  
• Ethical duties to the customer that are owed by a producer to those that rely on others.  
• Accounting principles and the ethics of helping others, such as fellow employees.  
• Duties to the principal, including loyalty, accounting, obeying the principal’s lawful instructions (and if they are not lawful).  
• Advertising and sales presentation ethical challenges.  
• Laws that govern ethical conduct, including hearings processes, cease and desist orders, specific regulations, penalties relegated to unlawful acts, and other legal issues that affect producers. 
• Who is the Fraud Division, its primary programs, including the Bureau of Fraudulent Claims and associated sections of law, sections 549 and 550 of the California Penal Code, and why does the Fraud Division exist; 
• Fraud divisions in the state: Automobile, Property/Life/Casualty, Disability/Healthcare, and Workers’ Compensation fraud programs; 
• Types of fraud cases and a review of recent cases (SIU Blasts); 
• A general overview of insurer requirements, including specific sections of state code, associated definitions, exceptions, and complying with the Insurance Fraud Prevention Act; 
• Fraud detection, available databases including the arson database, false and fraudulent claims, fraud trends in California, fraud indicators, referral of potential fraudulent activity, single and multiple-company SIUs; 
• Cooperation with law enforcement including the Fraud Division and authorized government agencies; 
• Suspected insurance fraud, and a review of efforts to combat fraud. 

At the end of this course, there will be an examination that must be passed with a score of 70% or better. The exam may be taken as many times as needed to pass.  

CA Insurance Division Course ID: 392408