Kentucky Insurance Fraud Laws
Insurance fraud is essentially an attempt to improperly benefit from an insurance policy. The offender can be either the insured party or the insurer. Most insurance fraud can be classified as either "hard fraud" or "soft fraud." Hard insurance fraud occurs when someone intentionally fakes an accident, injury, theft, or arson in order to illegally collect from an insurer. Soft insurance fraud is also illegal and exists where a policyholder exaggerates the extent of their injury or loss in order to pad their insurance claim.
Both hard and soft insurance fraud is criminalized under Kentucky's main insurance fraud law, the Fraudulent Insurance Act. The following chart illustrates the key points of this act.
|Kentucky Revised Statutes section 304.47-020: The Fraudulent Insurance Act|
|A person or entity engaging in any of the following knowingly and with the intent to defraud:
Felony Offenses Related to Kentucky's Fraudulent Insurance Act
Any person who is convicted under the Fraudulent Insurance Act and then knowingly participates in the insurance business in Kentucky is guilty of a Class D felony. It is also a crime for an insurer to knowingly permit the offender to participate in the insurance business after being convicted. However, an offender may again participate in the insurance business in Kentucky if he or she receives consent from the commissioner.
Reporting Possible Fraudulent Insurance Acts
Under Kentucky's fraudulent insurance laws, some people are required to report suspected fraudulent insurance acts. The groups of people who are required to report possible fraudulent insurance acts include:
- Professional practitioners licensed or regulated by Kentucky (except as provided by law)
- Private medical review committees
- Insurers, agents, or other people license under this chapter, and
- Any employee who works for one of the above mentioned people or groups of people
All other people aren't required by law to report suspected fraudulent acts but are encouraged to do so. All informants (as long as they didn't act maliciously, fraudulently, or in a grossly negligent manner) won't be held liable for slander, libel, or any other relevant tort because of their report.
State laws change frequently. For case specific information regarding Kentucky's insurance fraud laws contact a local insurance attorney.
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