The Investigation Section investigates all areas of fraudulent insurance activities. This includes claimant fraud, agent fraud, insurance company fraud, medical care provider fraud, insurance document fraud, premium fraud, and agents/agencies/ companies operating without a license or certificate of authority, and workers' compensation fraud. The investigation unit also conducts background checks of insurance license applicants.

The investigators have been issued a special commission from the State of Alaska, Department of Public Safety, authorizing them to obtain and execute public search warrants. Alaska Statutes also provide the authority for the investigators to utilize the subpoena duces' tecum issued by the director for the collection of information. This tool is used in administrative cases.

All investigations are conducted following the criminal rules of procedure and Alaska Rules of Court. In this way, we insure that all facts and evidence collected are admissible in a court of law regardless of whether it is being processed criminally or administratively.

The Investigation Section's guidelines are defined mostly within Alaska Statutes Title 21. The workers' compensation guidelines are defined in Title 23. Alaska Statutes Title 21, Section 36, relates to the trade practices and frauds. Alaska Statute 21.36.360 defines fraudulent and criminal insurance acts. We also refer to Alaska Statutes Title 11, the general criminal statutes and refer any that are appropriate along with violations of the insurance statute.

In Alaska Statutes Tile 21, Section 36, the criminal penalties and class of offense are determined by the amount of money involved. The statutes do not require an actual monetary loss; an attempt to get the money is sufficient. A misdemeanor offense deals with figures up to $500. A felony offense deals with figures over $500. In cases where the dollar amount is between $500 and $5,000, the suspect may be ultimately charged as a misdemeanor because of the time and resources necessary to prosecute a felony case. In a felony case, a case must be presented to a grand jury unless the suspect waives such. If a grand jury is called and the suspect indicted, an arrest warrant is issued unless the person is in custody. The suspect's first court appearance on a felony count is known as an initial appearance and no plea can be taken at that time. The suspect is advised of the charges and a determination as to an attorney is made. All these steps take up valuable time and resources, which may be needed for more serious crimes. In an agreement between the District Attorney's Office and the Division of Insurance, we accept the value of their time and have no problem with those cases prosecuted and sentenced as misdemeanors as long as the restitution amount is for the actual amount of loss. The suspect is more willing to accept a misdemeanor conviction instead of a felony, for obvious reasons. The end result is the case gets into the prosecutorial system and processed through, provided all the statutory requirements can be proven. This system will also cut down on court time and expedite the cases through more smoothly.

Most other law enforcement agencies will not investigate cases which involve a monetary amount less than $5,000, and of those just over that amount are highly scrutinized as to how to utilize their resources to the best potential. We at the Division of Insurance realize that most fraudulent insurance cases involving claimant fraud fall between the $500 and $5,000 amount. Since almost no one will touch those cases, the system is easily accessible for abuse.

The final report in its entirety is submitted to the State of Alaska, Department of Law. For criminal prosecution, we utilize either the District Attorney's Office or Office of Special Prosecution and Appeals for complicated, high dollar type cases. The investigators present cases to the property crimes section of the District Attorney's Office. The Attorney General's Office is utilized for cases involving administrative action. The Division of Insurance has two assigned assistant attorneys general that handle all administrative action cases.

Upon initial complaint, we require a written letter of complaint, which must include how the complainant was the victim of insurance fraud or has information regarding insurance fraud. Attached to the letter of complaint needs to be corroborating documentation and/or evidence already obtained. Once this letter is received, we review it and determine if there is cause to believe that there has been a violation of criminal and/or fraudulent insurance acts. Once that has been determined, or there is cause to believe the incident requires further investigating, a case number is generated and a request for appointment is addressed to the director.

Because there are currently only four investigators, our caseload is quite heavy and some cases involve very complicated and time-consuming investigations. This is especially true for cases that will be presented for both criminal and administrative action. As best as possible, we attempt to work on several cases at the same time and must practice triage to determine what absolutely needs to be done and in what order.