Quiz on Insurance Fraud: Commissions & Contest Codes

Questions and Answers

Aflac's Understanding Insurance Fraud and Prohibited Practices guide includes _______________.

Policy administration and claims administration prohibited practices and Corrective actions and FAQs

Fraud is an intentional act, omission or violation of trust designed to _____ others.

deceive

Prohibited Practices include acts that _______ the procedures, industry codes, branding or security as outlined in the Prohibited Practices document.

violate

One way Susan, an insurance sales producer, keeps her enrollments up and increases her sales is to encourage her customers to replace existing coverage every two years. This is ________.

called churning and is a prohibited practice Signup and view all the answers

Bob, a new insurance sales producer, provides a customer misleading information to get the customer to surrender a current policy with another carrier. This is ___________.

called twisting and is a prohibited practice Signup and view all the answers

Alicia, an Aflac producer, is unsure if she is allowed to write business while on disability. She should ____________.

review the insurance fraud and prohibited practices document Signup and view all the answers

Jaron, an Aflac producer, is concerned his customers may not be able to sign applications. He should ___________.

review the insurance fraud and prohibited practices document Signup and view all the answers

We create environments that are free from discrimination and harassment. This means ______________________ toward other people.

refraining from inappropriate conduct Signup and view all the answers

Contacting any of the businesses, accounts or brokers on the Do Not Contact List for which you are not the servicing agent is a prohibited practice.

True Signup and view all the answers

A situation that arises in which a producer's self-interest interferes with their obligation to act in the best interests of a customer is called a ______________.

conflict of interest Signup and view all the answers

Individuals representing Aflac cannot participate in any portion of the sales process, _________________, until they're appropriately licensed and appointed.

including soliciting and negotiating Signup and view all the answers

Aflac has a ________ policy regarding contest manipulation.

zero tolerance Signup and view all the answers

Splitting commissions or using SIT codes for contest qualification is _____________.

False Signup and view all the answers

Contest manipulation will result in ____

chargebacks and disciplinary action up to and including termination Signup and view all the answers

Incentive programs include __________.

promotions, contests, sweepstakes Signup and view all the answers

If Aflac discovers a producer or coordinator won a contest or reward based on invalid business, Aflac will charge the producer for the amount of the contest winnings, as well as ____________.

charge back their hierarchy Signup and view all the answers

As an Aflac producer, you are relieved of the responsibility for continuing education that is required by some jurisdictions.

False Signup and view all the answers

You ______________ a Suitability Notice to potential policyholders in all U.S. states and territories.

will need to explain Signup and view all the answers

___ is NOT a valid reason for replacing a policy.

declining health status Signup and view all the answers

Examples of need-based selling are ____________.

asking your customer about their current insurance coverage, using salary illustration to show the impact of premium payments on take-home pay Signup and view all the answers

Fraud is defined as __________.

an intentional act, omission or violation of trust designed to deceive others, resulting in the victim suffering a loss and/or the perpetrator achieving a gain Signup and view all the answers

What is a prohibited practice?

An act that violates industry procedures, codes, or trust. Signup and view all the answers

Study Notes

Understanding Insurance Fraud and Prohibited Practices

Aflac's guide includes policies on administration, claims, prohibited practices, corrective actions, and FAQs regarding insurance fraud.

Definition of Fraud

Fraud is an intentional act intended to deceive others, leading to losses for victims or gains for perpetrators.

Violations of Prohibited Practices

Prohibited practices encompass actions that violate outlined procedures, industry codes, branding, or security measures.

Churning

Churning occurs when a producer misleads customers into replacing existing insurance coverage every two years, prioritizing sales over suitability.

Twisting

Twisting involves providing misleading information to persuade customers to abandon a current policy for a new one, aimed at generating commissions.

Guidelines for Producers on Disability

Producers receiving benefits should review guidelines on fraud and prohibited practices before engaging in business activities while on disability.

Virtual Enrollment Procedures

Producers conducting virtual enrollments should consult fraud guidelines regarding customer signatures and initial entries.

Non-Discrimination Policy

Aflac promotes an environment free from discrimination and harassment, necessitating respectful conduct towards all individuals.

Do Not Contact List

Contacting entities on the Do Not Contact List without being the servicing agent is strictly prohibited.

Conflict of Interest

A conflict of interest arises when a producer's self-interest conflicts with their duty to act in the customer's best interests.

Licensing and Sales Participation

Individuals must be properly licensed and appointed before participating in any sales activities, including solicitation and negotiation.

Contest Manipulation Policy

Aflac has a zero-tolerance policy regarding contest manipulation among producers, emphasizing fairness in rewards.

Commission Splitting and Contest Qualification

Splitting commissions or misusing SIT codes for contest qualification is not permitted and is subject to scrutiny.

Consequences of Contest Manipulation

Contest manipulation can lead to chargebacks and disciplinary actions, potentially resulting in termination.

Incentive Programs

Aflac's incentive programs include various promotions, contests, and sweepstakes aimed at enhancing producer performance.

Discovery of Invalid Contest Winnings

If Aflac finds that a producer won a contest based on invalid business, they will charge back the winnings and their hierarchy.

Continuing Education Responsibility

Aflac producers are not exempt from the continuing education requirements mandated by some jurisdictions.

Suitability Notice Requirement

Producers must explain the Suitability Notice to potential policyholders across all U.S. states and territories.

Invalid Reasons for Policy Replacement

Declining health status is not considered a valid reason for replacing an insurance policy.

Need-Based Selling Examples

Effective need-based selling includes inquiries about customers' current coverage and salary illustrations to demonstrate premium impacts on take-home pay.

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Description

This quiz explores key concepts related to insurance fraud, including definitions, prohibited practices, and specific tactics like churning and twisting. It provides insights into guidelines for producers and the importance of adhering to ethical practices in the industry.

Insurance Fraud and Prohibited Practices