2010 Pennsylvania Code
Title 18 - CRIMES AND OFFENSES
Chapter 41 - Forgery and Fraudulent Practices
4117 - Insurance fraud.

     § 4117.  Insurance fraud.
        (a)  Offense defined.--A person commits an offense if the
     person does any of the following:
            (1)  Knowingly and with the intent to defraud a State or
        local government agency files, presents or causes to be filed
        with or presented to the government agency a document that
        contains false, incomplete or misleading information
        concerning any fact or thing material to the agency's
        determination in approving or disapproving a motor vehicle
        insurance rate filing, a motor vehicle insurance transaction
        or other motor vehicle insurance action which is required or
        filed in response to an agency's request.
            (2)  Knowingly and with the intent to defraud any insurer
        or self-insured, presents or causes to be presented to any
        insurer or self-insured any statement forming a part of, or
        in support of, a claim that contains any false, incomplete or
        misleading information concerning any fact or thing material
        to the claim.
            (3)  Knowingly and with the intent to defraud any insurer
        or self-insured, assists, abets, solicits or conspires with
        another to prepare or make any statement that is intended to
        be presented to any insurer or self-insured in connection
        with, or in support of, a claim that contains any false,
        incomplete or misleading information concerning any fact or
        thing material to the claim, including information which
        documents or supports an amount claimed in excess of the
        actual loss sustained by the claimant.
            (4)  Engages in unlicensed agent, broker or unauthorized
        insurer activity as defined by the act of May 17, 1921
        (P.L.789, No.285), known as The Insurance Department Act of
        one thousand nine hundred and twenty-one, knowingly and with
        the intent to defraud an insurer, a self-insured or the
        public.
            (5)  Knowingly benefits, directly or indirectly, from the
        proceeds derived from a violation of this section due to the
        assistance, conspiracy or urging of any person.
            (6)  Is the owner, administrator or employee of any
        health care facility and knowingly allows the use of such
        facility by any person in furtherance of a scheme or
        conspiracy to violate any of the provisions of this section.
            (7)  Borrows or uses another person's financial
        responsibility or other insurance identification card or
        permits his financial responsibility or other insurance
        identification card to be used by another, knowingly and with
        intent to present a fraudulent claim to an insurer.
            (8)  If, for pecuniary gain for himself or another, he
        directly or indirectly solicits any person to engage, employ
        or retain either himself or any other person to manage,
        adjust or prosecute any claim or cause of action against any
        person for damages for negligence or, for pecuniary gain for
        himself or another, directly or indirectly solicits other
        persons to bring causes of action to recover damages for
        personal injuries or death, provided, however, that this
        paragraph shall not apply to any conduct otherwise permitted
        by law or by rule of the Supreme Court.
        (b)  Additional offenses defined.--
            (1)  A lawyer may not compensate or give anything of
        value to a nonlawyer to recommend or secure employment by a
        client or as a reward for having made a recommendation
        resulting in employment by a client; except that the lawyer
        may pay:
                (i)  the reasonable cost of advertising or written
            communication as permitted by the rules of professional
            conduct; or
                (ii)  the usual charges of a not-for-profit lawyer
            referral service or other legal service organization.
        Upon a conviction of an offense provided for by this
        paragraph, the prosecutor shall certify such conviction to
        the disciplinary board of the Supreme Court for appropriate
        action. Such action may include a suspension or disbarment.
            (2)  With respect to an insurance benefit or claim
        covered by this section, a health care provider may not
        compensate or give anything of value to a person to recommend
        or secure the provider's service to or employment by a
        patient or as a reward for having made a recommendation
        resulting in the provider's service to or employment by a
        patient; except that the provider may pay the reasonable cost
        of advertising or written communication as permitted by rules
        of professional conduct. Upon a conviction of an offense
        provided for by this paragraph, the prosecutor shall certify
        such conviction to the appropriate licensing board in the
        Department of State which shall suspend or revoke the health
        care provider's license.
            (3)  A lawyer or health care provider may not compensate
        or give anything of value to a person for providing names,
        addresses, telephone numbers or other identifying information
        of individuals seeking or receiving medical or rehabilitative
        care for accident, sickness or disease, except to the extent
        a referral and receipt of compensation is permitted under
        applicable professional rules of conduct. A person may not
        knowingly transmit such referral information to a lawyer or
        health care professional for the purpose of receiving
        compensation or anything of value. Attempts to circumvent
        this paragraph through use of any other person, including,
        but not limited to, employees, agents or servants, shall also
        be prohibited.
            (4)  A person may not knowingly and with intent to
        defraud any insurance company, self-insured or other person
        file an application for insurance containing any false
        information or conceal for the purpose of misleading
        information concerning any fact material thereto.
        (c)  Electronic claims submission.--If a claim is made by
     means of computer billing tapes or other electronic means, it
     shall be a rebuttable presumption that the person knowingly made
     the claim if the person has advised the insurer in writing that
     claims will be submitted by use of computer billing tapes or
     other electronic means.
        (d)  Grading.--An offense under subsection (a)(1) through (8)
     is a felony of the third degree. An offense under subsection (b)
     is a misdemeanor of the first degree.
        (e)  Restitution.--The court may, in addition to any other
     sentence authorized by law, sentence a person convicted of
     violating this section to make restitution.
        (f)  Immunity.--An insurer, and any agent, servant or
     employee thereof acting in the course and scope of his
     employment, shall be immune from civil or criminal liability
     arising from the supply or release of written or oral
     information to any entity duly authorized to receive such
     information by Federal or State law, or by Insurance Department
     regulations.
        (g)  Civil action.--An insurer damaged as a result of a
     violation of this section may sue therefor in any court of
     competent jurisdiction to recover compensatory damages, which
     may include reasonable investigation expenses, costs of suit and
     attorney fees. An insurer may recover treble damages if the
     court determines that the defendant has engaged in a pattern of
     violating this section.
        (h)  Criminal action.--
            (1)  The district attorneys of the several counties shall
        have authority to investigate and to institute criminal
        proceedings for any violation of this section.
            (2)  In addition to the authority conferred upon the
        Attorney General by the act of October 15, 1980 (P.L.950,
        No.164), known as the Commonwealth Attorneys Act, the
        Attorney General shall have the authority to investigate and
        to institute criminal proceedings for any violation of this
        section or any series of such violations involving more than
        one county of the Commonwealth or involving any county of the
        Commonwealth and another state. No person charged with a
        violation of this section by the Attorney General shall have
        standing to challenge the authority of the Attorney General
        to investigate or prosecute the case, and, if any such
        challenge is made, the challenge shall be dismissed and no
        relief shall be available in the courts of the Commonwealth
        to the person making the challenge.
        (i)  Regulatory and investigative powers additional to those
     now existing.--Nothing contained in this section shall be
     construed to limit the regulatory or investigative authority of
     any department or agency of the Commonwealth whose functions
     might relate to persons, enterprises or matters falling within
     the scope of this section.
        (j)  Violations, penalties, etc.--
            (1)  If a person is found by court of competent
        jurisdiction, pursuant to a claim initiated by a prosecuting
        authority, to have violated any provision of this section,
        the person shall be subject to civil penalties of not more
        than $5,000 for the first violation, $10,000 for the second
        violation and $15,000 for each subsequent violation. The
        penalty shall be paid to the prosecuting authority to be used
        to defray the operating expenses of investigating and
        prosecuting insurance fraud. The court may also award court
        costs and reasonable attorney fees to the prosecuting
        authority.
            (2)  Nothing in this subsection shall be construed to
        prohibit a prosecuting authority and the person accused of
        violating this section from entering into a written agreement
        in which that person does not admit or deny the charges but
        consents to payment of the civil penalty. A consent agreement
        may not be used in a subsequent civil or criminal proceeding,
        but notification thereof shall be made to the licensing
        authority if the person is licensed by a licensing authority
        of the Commonwealth so that the licensing authority may take
        appropriate administrative action. Penalties paid under this
        section shall be deposited into the Insurance Fraud
        Prevention Trust Fund created under the act of December 28,
        1994 (P.L.1414, No.166), known as the Insurance Fraud
        Prevention Act.
            (3)  The imposition of any fine or other remedy under
        this section shall not preclude prosecution for a violation
        of the criminal laws of this Commonwealth.
        (k)  Insurance forms and verification of services.--
            (1)  All applications for insurance and all claim forms
        shall contain or have attached thereto the following notice:
                Any person who knowingly and with intent to defraud
                any insurance company or other person files an
                application for insurance or statement of claim
                containing any materially false information or
                conceals for the purpose of misleading, information
                concerning any fact material thereto commits a
                fraudulent insurance act, which is a crime and
                subjects such person to criminal and civil penalties.
            (2)  (Repealed).
        (l)  Definitions.--As used in this section, the following
     words and phrases shall have the meanings given to them in this
     subsection:
        "Insurance policy."  A document setting forth the terms and
     conditions of a contract of insurance or agreement for the
     coverage of health or hospital services.
        "Insurer."  A company, association or exchange defined by
     section 101 of the act of May 17, 1921 (P.L.682, No.284), known
     as The Insurance Company Law of 1921; an unincorporated
     association of underwriting members; a hospital plan
     corporation; a professional health services plan corporation; a
     health maintenance organization; a fraternal benefit society;
     and a self-insured health care entity under the act of October
     15, 1975 (P.L.390, No.111), known as the Health Care Services
     Malpractice Act.
        "Person."  An individual, corporation, partnership,
     association, joint-stock company, trust or unincorporated
     organization. The term includes any individual, corporation,
     association, partnership, reciprocal exchange, interinsurer,
     Lloyd's insurer, fraternal benefit society, beneficial
     association and any other legal entity engaged or proposing to
     become engaged, either directly or indirectly, in the business
     of insurance, including agents, brokers, adjusters and health
     care plans as defined in 40 Pa.C.S. Chs. 61 (relating to
     hospital plan corporations), 63 (relating to professional health
     services plan corporations), 65 (relating to fraternal benefit
     societies) and 67 (relating to beneficial societies) and the act
     of December 29, 1972 (P.L.1701, No.364), known as the Health
     Maintenance Organization Act. For purposes of this section,
     health care plans, fraternal benefit societies and beneficial
     societies shall be deemed to be engaged in the business of
     insurance.
        "Self-insured."  Any person who is self-insured for any risk
     by reason of any filing, qualification process, approval or
     exception granted, certified or ordered by any department or
     agency of the Commonwealth.
        "Statement."  Any oral or written presentation or other
     evidence of loss, injury or expense, including, but not limited
     to, any notice, statement, proof of loss, bill of lading,
     receipt for payment, invoice, account, estimate of property
     damages, bill for services, diagnosis, prescription, hospital or
     doctor records, X-ray, test result or computer-generated
     documents.
     (Feb. 7, 1990, P.L.11, No.6, eff. 60 days; Dec. 19, 1990,
     P.L.1451, No.219, eff. imd.; Dec. 28, 1994, P.L.1408, No.165,
     eff. 60 days; July 6, 1995, P.L.242, No.28, eff. 60 days)

        1995 Repeal Note.  Act 28 repealed subsec. (k)(2).
        References in Text.  Chapter 65 of Title 40 (Insurance),
     referred to in this section, is repealed. The subject matter is
     now contained in Subarticle A of Article XXIV of the act of May
     17, 1921 (P.L.682, No.284), known as The Insurance Company Law
     of 1921.
        The act of December 28, 1994 (P.L.1414, No.166), known as the
     Insurance Fraud Protection Act, referred to in subsec. (j)(2)
     was repealed by the act of December 6, 2002, P.L.1183, No.147.
     The subject matter is now contained in Article XI of the act of
     May 17, 1921 (P.L.682, No.284), known as The Insurance Company
     Law of 1921.
        Cross References.  Section 4117 is referred to in sections
     911, 5708 of this title; section 5552 of Title 42 (Judiciary and
     Judicial Procedure).