North Carolina's Insurance Crimes Investigation System has eliminated antiquated manual processes and simplified the way insurance fraud data is handled. The changes have helped crack down on insurance fraud.
This year North Carolina has seen a 90 percent increase in efficiency for managing cases related to insurance fraud. The key to the state’s success is a new tool called the Insurance Crimes Investigation System (ICIS), which was implemented in March after well more than a year of design and development.
ICIS is the product of a collaboration between the North Carolina Department of Insurance (DOI), the North Carolina Government Data Analytics Center and SAS Institute. The state had been using State Based Systems (SBS) software, designed by the National Association of Insurance Commissioners, to manage investigations of fraud.
Keith Briggs, chief information officer for DOI, said he doesn’t want to disparage SBS and that it’s great in general for the state insurance system, but SBS simply wasn’t the right tool for managing criminal investigations.
Frank Rodriguez, deputy commissioner of DOI’s criminal investigation division, said the SBS solution presented multiple issues. First, the system led to multiple instances of duplicative efforts. If two people happened to investigate the same case, there was no way of recognizing that.
“Part of the problem was there was no transparency in the sense that you could not use this for your criminal investigation and collate or pull additional information from historical data or current data that already existed,” Rodriguez said.
Moreover, any input in SBS was assigned as a case. There was no way to efficiently segregate data like complaints and supplementary information.
“The challenge we had previously was that it was a big repository for just a bunch of information,” Rodriguez said. “Essentially you had one big paragraph that you could type everything in, and it would take somebody to go in there and actually extrapolate what that was and what it meant, and at the end of that, you would end up reading 10 pages worth to recognize that it was a civil complaint [which DOI doesn’t handle].”
ICIS has completely flipped the script. When data comes in from online fraud reporting mechanisms, information is filtered by an algorithm into the appropriate bucket. This means that when an agent in North Carolina is assigned a case, it’s always an actual case rather than a random type of information.
The system also allows agents to seamlessly correlate relevant facts for cases from the initial investigation all the way to the prosecution summary.
“That ability to manage the input of data and appropriately segregate it and then focus all of our efforts purely on cases — that’s where we’re getting that huge efficiency increase as an organization,” Rodriguez said.
“It was all previously manual … It’s a huge difference today than what it was yesterday,” Briggs added.
Rodriguez said ICIS also has fail-safes for customer service. For instance, when a victim of fraud is a person, an agent is required to contact the person within 72 hours. ICIS will send a reminder to an agent to contact the victim. If the agent doesn’t act on that reminder, the agent’s supervisor will get a reminder to ensure the agency does its part for the customer.
DOI’s greater efficiency with the new system has contributed to impressive outcomes in 2020.
“The big thing I pay attention to is arrests, the number of arrests we’ve had,” Rodriguez said. “Since the new system and since our agency has grown, we’ve doubled the amount of arrests and doubled the amount of counties that we are reaching and having arrests in.”
Criminals make more than $40 billion a year in the United States through insurance fraud, according to the FBI. To put things in context, State Insurance Commissioner Mike Causey last year pointed out the amount of insurance money that is lost to fraud in North Carolina.
“Out of every dollar we're paying for insurance premiums, close to 20 cents of that is going to cover fraud,” Causey told WRAL.
Briggs said insurance fraud is an industry of sorts, which underlines the importance of improvements like ICIS.
“[T]he more that we can define, identify, arrest, prosecute, and recover, the safer that North Carolina becomes for the insurance industry to operate and the lower my premium becomes because it’s less fraud related,” Briggs explained.
Rodriguez said ICIS isn’t a finished product just yet. Thanks to Briggs’ help with a website overhaul, there will be an online fraud reporting form that will further ensure efficiency. And if a user’s submitted information doesn’t become a case, there’s no need to worry.
“You’re going to get assigned an incident number because it’s not a case, and later on if you get more information, you can go back to your incident number and then maybe it will become a case,” Rodriguez explained. “At no time would we lose that. That is coming in the near future.”
Other states have shown interest in North Carolina’s system. When it comes to advice for implementing such a system, both Rodriguez and Briggs spoke to the importance of testing the system with the people who will be using it and drawing from their input and experiences. Rodriguez said SAS has highlighted North Carolina for emphasizing collaboration.
“[SAS] works with other organizations that did not do that,” Rodriguez said. “[Other orgs] had one or two people who were the project leads, and that’s the direction they went, and then as a result, there were some discrepancies, where we had an implementation team that incorporated everyone. That’s really the success of this design.”
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