| By
David Thompson, CPCU |
Florida statutes require that all
applications for insurance contain a fraud statement. The statute in question
is as follows:
817.234 False and fraudulent insurance claims.--
(1)(b) All claims and application forms shall contain a
statement that is approved by the Office of Insurance Regulation of the
Financial Services Commission which clearly states in substance the following:
"Any person who knowingly and with intent to injure, defraud, or deceive any
insurer files a statement of claim or an application containing any false,
incomplete, or misleading information is guilty of a felony of the third
degree." This paragraph shall not apply to reinsurance contracts, reinsurance
agreements, or reinsurance claims transactions.
A key point of the statute is that the
fraud statement must be contained within the application. If a company
uses an application that does not contain a fraud statement, it is not
acceptable to simply have a separate document containing the fraud statement
signed by the insured. The Florida Department of Financial Services (DFS)
takes the position that the statutes require the fraud statement to be part of
the application. In cases where the application has no fraud statement it
would be necessary for the company to redesign the application in order to
comply with the statute.
Many agencies use standard ACORD
applications. Almost all ACORD applications contain a fraud statement, and
while the wording on those applications is not a 100% word-for-word match to
the Florida statutes the DFS has stated that as long as the fraud wording on
an application is substantially identical to the statutory wording then it
meets to legal requirement. The wording in ACORD forms is substantially
identical and the DFS stated that ACORD applications are acceptable for use in
Florida. Company specific applications should be examined to make certain
they are substantially identical.
This requirement applies to all
applications and claim forms, not just those of authorized carriers. It also
applies to "all applications" by whatever name called: supplemental
applications, questionnaires, etc.
6/25/04 David
Thompson
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