Definition of an offense.--A person is guilty of an offense if they do any one of the following:

(1) To defraud any self-insured or insurer, conspires to assist, encourage, solicit or conspire with another to prepare or support any claim. This includes any information that documents or supports a claim for an amount that exceeds the actual loss suffered by the claimant.

(2) Engages as an unlicensed broker, agent, or in unauthorized insurance activity, as defined by The Insurance Department Act (P.L.789 No.285).

(3) The proceeds of a violation under this section due to the aid, conspiracy, or urging of any other person are known to be a benefit to the knowingly.

(4) The owner, administrator, or employee of any healthcare facility who knowingly allows any person to use such facility in support of a scheme or conspiracy to violate any provisions of this section.

(5) Uses or borrows another person's insurance ID card or financial responsibility or allows another to use his insurance ID card or financial obligation, knowing that he is submitting a fraudulent claim.

(6) He solicits, direct or indirect, any person to employ, retain, or manage any claim or cause action against any person for damages due to negligence, or to seek financial gains for himself or others, except that the paragraph does not apply to any other conduct permitted by law or rule of Supreme Court.

(b) Additional offenses are defined.

(1) Lawyers cannot offer any compensation or other value to clients to secure or recommend employment.

(i) reasonable advertising costs or written communications as allowed by the rules for professional conduct.

(iii) The usual fees of a non-profit lawyer referral agency or other legal service organization.

The prosecutor must certify that a defendant has been convicted of an offense as provided by this paragraph to the Supreme Court. This action could include suspension or disbarment.

(2) A health care provider cannot pay or compensate a person for recommending or securing an insurance benefit or claim. In addition, the prosecutor must certify that a person has been convicted of the offense outlined in this paragraph to the Department of State. This will suspend or revoke the license of the health care provider.

This exception applies only to cases where a referral and payment are allowed under the applicable professional rules of conduct. It is also prohibited to bypass this paragraph by using any other person, such as employees, agents, or servants.

(3) Law is against of any person to knowingly or with the intent of defrauding an insurance company, self-insured, or any other person to file an insurance application containing false information or concealing misleading information about any material fact.

(c) Electronic claims submission.- If a claim is made using computer billing tapes, or other electronic methods, it will be a rebuttable pretence that the claim was made knowingly if the person has informed the insurer in writing that they will submit claims by computer billing tapes.

(d) Grading.--An infraction under subsection (a(1) through (8) constitutes a third-degree felony. A misdemeanour in the first degree is an offence under subsection (b).

(e) Restitution.--In addition to any other sentence allowed by law, the court can sentence someone convicted of violating this subsection to make restitution.

(f) Immunity.--An insurance company and its agents, servants, or employees shall be exempt from civil and criminal liability for the supply or dissemination of written or oral information to any entity authorized by Federal or State law or Insurance Department regulations to receive such information.

(g) Civil action. An insurer may file a lawsuit in any court with competent jurisdiction to seek compensatory damages. This may include reasonable investigation costs, legal fees, and costs. 

(h) Criminal actions.

(1) Any violation of this section shall be investigated by the district attorneys in each county.

(2) The Attorney General is authorized to initiate criminal proceedings and investigate any violation of this section. This includes any series of violations that involve more than one county or any other county in the Commonwealth. 

(i) Additional regulatory and investigative powers beyond those currently in place.--This section does not limit the regulatory or investigation authority of any department or organization of the Commonwealth whose functions may relate to individuals, enterprises, or matters within the scope of the section.

(j) Violations and penalties, etc.

(1) A person who is found guilty by a court of competent jurisdiction of violating any provision of this section shall be subject to civil sanctions not exceeding $5,000, $10,000, and $15,000 for each subsequent offense. The court can also award reasonable attorney fees and court costs to the prosecuting authorities.

The consent agreement cannot be used in any subsequent civil or criminal proceeding. However, the notification must be made to the licensing authorities if the person is licensed under a Commonwealth licensing authority to take appropriate administrative actions. The Insurance Fraud Prevention Trust Fund, established under Dec 28, 1994, Act (P.L.1414. No.166), shall receive any penalties.

(3) A fine or another remedy under the section does not prevent a criminal prosecution for violating the criminal laws in this Commonwealth.

(k) Insurance forms and verification services.

(1) All insurance applications and claim forms must contain the following notice.

Anyone who, knowingly or with the intent to defraud any insurance company or another person, files an application or statement of claim that contains any materially false information, or conceals information for misleading information, commits fraud in insurance. This is a crime that can lead to civil and criminal penalties.

(2) (Repealed).

(l) Definitions.- The following words and phrases will have the same meanings as in this subsection.

"Insurer." "Insurer" means a company, association, or exchange as defined by section 101 of The Insurance Company Law of 1921 (P.L.682, Number 284). It is also known as The Insurance Company Law of 1919. An unincorporated association of underwriting members; a hospital plan corp; a professional healthcare plan corporation; health maintenance organization; fraternal benefit society; and self-insured health care entity as per the Health Care Services Malpractice Act (P.L.390. No.111).

"Person" A person, corporation, partnership, or association. It also includes fraternal benefit societies, beneficial associations, and any other legal entity engaged in or proposing becoming involved in the business insurance. Chs. Chs. This section shall apply to health care plans, fraternal benefits societies, and beneficial societies engaged in business insurance.

"Self-insured." Anyone who is self-insured to cover any risk arising from any filing, qualification, approval, exception granted, certified or ordered by any department, agency, or commission of the Commonwealth.

1995 Repeal. Act 28 was repealed. (k)(2)

References in Text. This section refers to Chapter 65 of Title 40 (Insurance). The subject matter of this section is now found in Subarticle A of Article XXIV of May 17, 1921 (P.L.682, Number.284), also known as The Insurance Company Law of1921.

Subsec. The subject matter of this act is now found in Article XI of P.L.682, Number.284, also known as The Insurance Company Law of1921.

Cross References. Cross References. Section 4117 can be found in sections 911, 55708, and 3802 of Title 40. (Insurance); section 5652 of Title 42. (Judiciary & Judicial Procedure); and section 5552.