Valuing continuing professional education: Changing insurance field demands it

Several years ago, I was speaking with an insurance investigator when the subject of continuing education came up. I mentioned a particular insurance seminar I was considering attending. The investigator responded by saying, "I fail to see the value of continuing education as I previously worked for the government for 20 years, had significant professional training during that time, and obviously don't need any more." Slightly taken aback, I didn't pursue the conversation. But what I really wanted to say is that business is constantly evolving; it's much more high tech then it was and we now operate in a global environment. Despite the fact that the insurance industry has been around hundreds of years, the only constant is change.

The insurance industry is primarily regulated by the states in which a company transacts business. However, U.S. federal legislation also has impact. It wasn't that long ago that we didn't have regulations like the USA Patriot Act, Sarbanes Oxley, Gramm-Leach, Bliley, and the Drivers Privacy Protection Act. These are but a few of the laws enacted over the years. Generally speaking, the United States has entered into an unprecedented era of information privacy. In years past, the phrase "invasion of privacy" wasn't the buzzword that it is now.

What does regulation and legislation have to do with continuing education? Basically, these pieces of legislation have significant impact on insurance companies and the manner in which insurance investigations are conducted around the country. As these laws were enacted, conference speakers incorporated information about their potential impact on the industry in presentations about investigations, surveillance, and privacy. While some of these laws obviously apply to government agencies, the impact on corporate America is significant.

Professional networking
Meeting your professional peers is an essential part of any good investigator's professional repertoire. While some insurance seminars are limited to representatives from insurance companies, others draw a wide audience: city, state, and federal law enforcement officers; criminal analysts; prosecutors; private investigators; forensic experts; and CPAs to name a few. Any seminar attended by anti-fraud professionals is bound to be valuable to attendees. I can't tell you how many times I've met someone at an insurance fraud conference that I was later able to call upon because we determined that we had a mutual investigative interest in the same individual. Sooner or later, we're all investigating the same insurance fraud suspects.

In 2001, I was at an insurance industry fraud conference and unbeknown to me, so were two local investigators and a prosecutor with whom I was working a fraud case in California. I didn't recognize them because we'd never met in person. During one of the sessions I attended, one of the investigators happened to ask a question that led me to approach him afterward. Once the introductions were made, we made the connection. While meeting someone doesn't guarantee a positive outcome in a criminal case, building rapport can be integral in establishing the relationship necessary to facilitate working together.

Popular or current scams
One of the best ways to learn more about current scams and trends in the insurance industry is to network with other anti-fraud professionals at conferences. This is especially valuable because individuals and organized rings committing insurance fraud often target multiple insurance carriers. While some attendees may be reluctant to provide specific information about their companies' practices, sharing general information about cases or suspects in a broader sense is vital. If you don't probe too deeply about sensitive proprietary company practices, attendees are generally interested in exchanging information.

The 'one thing' rule
Many investigators approach conferences with the wrong attitude; they believe that they have to make numerous connections and learn significant new things to make it worthwhile to attend. I believe that if you come away from a conference having learned just one new thing that you can apply to your investigations over the next 20 years, then you're significantly better off. Most likely, if you go to conferences with this attitude, not only will you learn one new thing but much, much more. The same applies to contacts. You only have to make one new contact for the conference to be an overwhelming success especially if it's a law enforcement officer in the area in which you work, or a prosecutor or investigator who you may call to ask for assistance on a case.

What insurance companies look for in investigative vendors
Many insurance companies around the country outsource all or part of their investigations. Getting an insurance company's business can be extremely competitive. Besides the obvious qualifications, insurance companies often look hard at other intangibles such as specialized education that investigative personnel have obtained. The theory is that the more educated and informed the investigator, the better the work product. While there are no guarantees, better-educated investigators are going to be less of a liability to their clients.

Continuing education also benefits insurance personnel
Insurance company investigators are subpoenaed to testify at trial. Continuing professional education should work in your favor because it assists in establishing your qualifications and credibility as a witness. Conversely, a lack of continuing education could be used by defense lawyers trying to impeach the credibility of a witness.

Some states require it
Besides being a valuable thing to do, continuing professional education is also important because some states mandate that SIU personnel receive a minimum amount annually to comply with state regulations. New Jersey, for example, has such a requirement. Insurance companies who transact business in New Jersey and insure a certain number of lives (life and health insurance) or write a certain number of polices (property and casualty insurance), whether based in New Jersey or not, are required to be in compliance. Here is an excerpt of the New Jersey law requiring continuing education for insurance investigators:

11:16-6.5 Training program and manual for the prevention and detection of fraud:

"a) Except for automobile insurers that insure fewer than 2,500 New Jersey automobile policies and health insurers that insure fewer than 10,000 lives, the plan shall provide anti-fraud education for SIU investigators, SIU specialists, claims adjusters and underwriters that shall include a detailed and comprehensive program of insurance fraud awareness and education to prepare claims adjusting and underwriting personnel for insurance fraud prevention and detection." 

2. The training programs referred to in (a) 1 above shall be provided as follows:
iii. The Basic Entry Level Training shall be no less than nine hours of classroom instruction. The Continuing Education Training shall be no less than nine hours of training per year for SIU personnel and four hours per year for claims and underwriting personnel. Basic Entry Level training shall be given to all employees within 180 days from the commencement of their employment at each of these positions: underwriters, adjusters, claims processors, SIU investigators, or SIU specialists. The four hour continuous education training provided to non-SIU personnel shall emphasize the responsibility of all employees to identify and report indications of internal and external fraud to the proper authority." 

What's in it for you?
Insurance industry investigative seminars cover current investigative practices, legislative and regulatory changes, compliance, ethics, privacy issues, and current topics of interest for industry fraud professionals. Speaking of which, the annual ACFE Insurance Fraud Conference will be April 24-25 in Philadelphia. Don't miss your opportunity to network with other insurance industry professionals, find out about current scams, meet law enforcement and private sector investigators and fulfill your annual state continuing professional education requirements. (Plus accumulate CPEs for your CFE recertification.) Remember, to be successful at an industry conference, all you have to accomplish is one significant thing. Last year in Chicago, I did that and much more.

If the only constant is change, the failure to see the value in continuing professional education places you squarely behind the eight ball. See you in Philadelphia!

Daniel W. Draz, M.S., CFE, is a fraud investigator in the Special Investigation Unit at Standard Insurance Company in Portland, Ore.