AND PUBLIC SAFETY
DIVISION OF CRIMINAL JUSTICE
Insurance Fraud Detection Reward Program
Proposed New Rules: N.J.A.C. 13:88-3
Authorized by: Peter C. Harvey, Attorney General of New Jersey
Authority: N.J.S.A. 2C:21-4.7, Executive Reorganization Plan No.
7 (1998), Executive Order No. 9 (Hughes) and N.J.S.A. 52:14B-1
Calendar Reference: See Summary below for
explanation of exception to calendar requirement.
Proposed Number: PRN 2004-59
Submit comments by April 17, 2004 to
Assistant Attorney General
Insurance Fraud Prosecutor
Department of Law and Public Safety
P.O. Box 094
Trenton, N.J. 08625-0094
The agency proposal follows:
These rules are proposed in response to the enactment of N.J.S.A.
2C:21-4.7 which authorizes the Office of the Insurance Fraud Prosecutor
(OIFP) to provide for a reward program for the reporting of suspected
health care claims fraud, insurance fraud or any other criminal
offense involving or related to an insurance transaction. A reward
of up to $25,000 will be paid to persons providing information
leading to the arrest, prosecution and conviction of persons who
have committed health care claims fraud, insurance fraud or any
other criminal offense related to an insurance transaction. The
OIFP, which is established in the Division of Criminal Justice
in the Department of Law and Public Safety, is under the supervision
of the Attorney General.
Nothing in these proposed rules affects or alters the statutory
obligation found at N.J.S.A. 17:33A-9 to report violations of
the New Jersey Insurance Fraud Prevention Act to the OIFP.
Proposed N.J.A.C. 13:88-3.1 sets forth the scope and purpose of
the new chapter which is the implementation of those rules necessary
to establish the Insurance Fraud Detection Reward program.
Proposed N.J.A.C. 13:88-3.2 contains the definitions which are
necessary for the implementation of the new subchapter.
Proposed N.J.A.C.13:88-3.3 provides for the liberal construction
of these rules to permit the OIFP to discharge its statutory mandate.
Proposed N.J.A.C.13:88-3.4 provides the various procedures individuals
may use to report to the OIFP suspected cases of health care claims
fraud, insurance fraud or any other criminal offense relating
to an insurance transaction such as the toll free hotline telephone
number, the OIFP website and electronic mail.
Proposed N.J.A.C. 13:88-3.5 provides for a reward application
form and puts applicants on notice that they may be required to
give verbal statements under oath or sign written memorializations
of their verbal statements.
Proposed N.J.A.C. 13:88-3.6 provides that the reward application
form must be submitted within 30 days of the individual's initial
report to the OIFP of suspected health care claims fraud, insurance
fraud or any other criminal offense relating to an insurance transaction.
Proposed N.J.A.C. 13:88-3.7 provides that an informant may request
anonymity, but that in certain circumstances, by statute, court
rule or judicial decision, the informant's identity may have to
be disclosed. The proposed rule also provides that all information
and materials received by or maintained by the OIFP pursuant to
these rules are confidential and not subject to public access
pursuant to the Open Public Records Act, N.J.S.A. 47:1A-1 et seq.
Proposed N.J.A.C. 13:88-3.8 provides the criteria for evaluating
reward program applications. The information provided must directly
lead to the arrest, prosecution and conviction of a specific individual(s)
or entity(ies) for health care claims fraud, insurance fraud or
any other criminal offense involving or related to an insurance
Proposed N.J.A.C. 13:88-3.9 provides that within 90 days of the
conviction of the individual or entity identified by the applicant,
the OIFP must notify the applicant in writing of their eligibility
for the reward.
Proposed N.J.A.C. 13:88-3.10 lists those persons excluded from
eligibility for a reward, including individuals, and their immediate
family members, employed by the OIFP and insurance companies.
Proposed N.J.A.C. 13:88-3.11 provides the process for claiming
the reward amount and provides that if more than one individual
or entity is entitled to a reward in a particular case, the total
reward amount is to be apportioned among the eligible claimants
and will not exceed either five percent of the value of the fraud
or $25,000 whichever is less.
Proposed N.J.A.C. 13:88-3.12 provides the guidelines for determining
who is eligible to receive a reward when there is more than one
applicant in a single case.
Proposed N.J.A.C. 13:88-3.13 provides that if criminal charges
are subsequently dismissed against a defendant the applicant will
not be eligible for the reward, unless the result would be manifestly
Proposed N.J.A.C. 13:88-3.14 provides that the only appeal from
the Insurance Fraud Prosecutor's reward determination is to the
Attorney General, not through the Superior Court.
Proposed N.J.A.C. 13:88-3.15 provides for the severability of
any provision of these rules adjudged to be invalid.
The Appendix contains the reward application form.
Because the OIFP is providing a 60 day comment period, the proposal
is exempt from the rulemaking calendar requirement pursuant to
The proposed new rules articulate the statutory reporting requirements
established in N.J.S.A 2C:21-4.4 through -4.6 for the payment
of rewards for providing information which results in the arrest,
prosecution and conviction of an individual or entity for health
care claims fraud, insurance fraud, or any other criminal offense
related to an insurance transaction. The proposed new rules will
assist the OIFP in fighting insurance fraud in the State of New
Jersey. The reward program will be an incentive for individuals
and entities to report instances of insurance fraud that they
would not have otherwise reported to the OIFP.
The adoption of these proposed new rules should not have a significant
economic impact on any insurance companies. The rewards will be
paid from surcharges imposed pursuant to N.J.S.A. 17:33A-5.1 and
supplemented as necessary by amounts budgeted for the operation
of the OIFP.
Federal Standards Statement
A Federal standards analysis is not required as the proposed new
rules regulate the insurance fraud prevention and detection activities
in this State. These rules relate to an insurance fraud reporting
program which is the subject of State law and are not subject
to any Federal requirements or standards.
The OIFP does not anticipate that any jobs will be gained or lost
as a result of these proposed new rules. The OIFP invites commenters
to submit any data or studies concerning the jobs impact resulting
from the proposed new rule.
Agriculture Industry Impact
The OIFP does not anticipate any impact on the agriculture industry
from the proposed new rules.
Regulatory Flexibility Statement
The proposed new rules will apply to individuals who report suspected
insurance fraud to the OIFP none of which are small businesses
as that term is defined in the Regulatory Flexibility Act, N.J.S.A.
52:14B-16 et seq.
Smart Growth Impact
The proposed new rules will not have an impact on the achievement
of smart growth or the implementation of the State Development
and Redevelopment Plan.