SIU Today Fall 2017 - 28

More data sources likely will keep emerging, such as ...
Telematics. Sensors packed into vehicles could open up a wider
world of vehicle data before long. Was the driver's parked SUV
banged up by a hit-and-run driver two days after the owner bought
auto coverage? Or did the dustup happen three days prior, when
he was uninsured? Telematics are still frontier territory, waiting
for full insurer deployment. Yet they hold out great promise for
getting deeper into the truth of claims.
Wearables. Work vests and other clothing embedded with sensors
can help employers track an employee's whereabouts and activities
throughout each day. Did that claimed injury happen at the
loading dock when sensors suggest he was having lunch in the
cafeteria? Sensor equipped smart shoes can help measure flooring
conditions, alerting both workers and supervisors to potential
hazards. Did the worker really trip on a floor her own sensorladen shoes says is safe?
Home appliances. Home appliances and other non-traditional
devices could be fair game as they load up with Internet-connected
sensors.
A homeowner's coffee pot brewed java in his kitchen, even though
he insisted he was vacationing at the beach when his house
caught fire.

Yet large challenges also loom. First come fraudsters themselves.
Smart, tech-savvy criminals are constantly searching to get two
steps ahead of fraud fighters. Fraudsters may learn to hack devices,
manipulate data and forge evidence that supports their version
of the facts in a case. Imagine the mischief if crime rings can
breach vehicle black boxes to fabricate the events surrounding
staged car wrecks. It's a whole new world of tech cat-and-mouse,
especially if the data isn't encrypted.
Insurer civil cases can be full of tripwires as well. Defense counsel
can challenge data in civil suits (and criminal cases). Outdated
policy contracts and privacy notices may not hold up, taking
down fraud cases with it.
Policies typically broadly invoke a "duty to cooperate" or "duties
in the event of a loss". Such language largely defines insurer
contractual access to customer data. Yet virtually no policies
define what that means. Nor do they reflect the storage and
downloading of digital information from data-rich mobile devices,
email, laptops, zip drives, the cloud and broader IoT.
Unlike prosecutors, who often have immediate subpoena power,
insurer access to subpoenaed data generally arises only with a
lawsuit alleging breach of contract suit. It is generally triggered
by an insured's bad-faith civil action after the insurer denies a
claim for suspected fraud.
Fraud fighters will be challenged to raise their game. They also
should be embedded partners in helping insurers safely negotiate
this evolving terrain.
* Know devices well. Research their features and how they
operate in detail;
* Discovery should be carefully worded to accurately capture
the requested data, including cloud storage; and
*

Will a garage door reveal a claimant's SUV movements in a
suspected vehicle give-up? Will the interactive screen on the
refrigerator door detail a busy grocery trip by a workers-comp
claimant who insists she's bed-ridden by a painful back injury?
Digital assistants. Victor Collins was found dead in the backyard
hot tub of James Andrew Bates in Bentonville, AR. Bates called
it an accident. Investigators thought Bates might have murdered
him. They subpoenaed data from Bates' obedient Amazon Echo
digital assistant "Alexa".
Bates disclosed the data despite privacy and First Amendment
objections from Amazon in court. This is a murder case, yet
speaks to the potential for datamining digital assistants in fraud
investigations.
The future holds a boundless world of anti-fraud data. Evidencegathering in criminal and many civil fraud cases will be limited
only by the creativity and tech know-how of investigators to
imagine emerging new data sources for potential investigation.

28 | SIU TODAY | FALL 2017

Anticipate objections. Privacy, yes. Though maybe also HIPAA
(for medical data), First Amendment, unreliability or inaccuracy
of the data, evidentiary rules on hearsay, authentication,
relevance, and unfair prejudice.

More broadly for insurers, outdated policy language also should
be reviewed for relevance in an IoT era. Investigators should be
part of the discussion with their frontline insights. The goal is a
fair balance. Insurers must ensure policy terms protect legitimate
consumer privacy rights. Yet at the same time, insurers must
preserve their legitimate access to data, and fairly resolve claims
that raise questions.
Consumer and privacy groups are rightfully concerned about
how "Big Data" is used by government and business. As society's
privacy expectations continue falling amid the rush for people's
data, we can expect vigorous court challenges to data access, and
even attempts to legislate restrictions.
Strengthening the fraud fight, respecting legitimate privacy
rights and building the public trust are all worthy outcomes
of a well-crafted approach to capturing data in today's era of
heightened connections.
Dennis Jay is the Executive Director of the Coalition Against Insurance Fraud;
www.InsuranceFraud.org.

http://www.InsuranceFraud.org

SIU Today Fall 2017

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