California Insurance Department Expresses Displeasure with SIU Training Noncompliance

By Cailie Currin, President & CEO

California State - black on white background
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It isn’t often when an Insurance Department issues an e-blast to note a compliance deficiency, but that is exactly what California did on April 20, 2020. The e-blast specifically referenced six anonymized insurers that failed to comply with SIU (Special Investigative Unit) training requirements. The CID also pointed out that the “training findings resulted in some of the highest noncompliance penalties approved by the Insurance Commissioner this past year.” 

That is also significant because this is not directly a consumer protection issue. This is a basic compliance issue. The California regulations requires specific anti-fraud training for company personnel and these companies did not comply. In one case the eblast refers to 90% of the integral anti-fraud employees the Department tested did not receive the required training.

Because of the well-reported instances of fraud related to COVID-19 (though not necessarily insurance fraud), this seems a timely reminder to comply with SIU requirements, including training mandates. Because of the expected significant budget shortfalls all states are likely to experience in the coming months and years related to COVID-19, fines are likely to increase across the board. Don’t make it easy by having violations of this type.

Make sure all required training happens, document the training, and retain records of the training.