““SWARM Interaction with Premium Audit”SWARM Interaction with Premium Audit”

““Game changing insurance servicesGame changing insurance services

and cost-containment solutionsand cost-containment solutions””

Providing insurance services across all lines that will

Shield, Protect & Shield, Protect & DefendDefend

a company’s investment like no other!

What happened over the last 5 years of a struggling

economy?

Corporate Greed – Top Down Silo Management within Corporation Lack of Risk Controls Fear of Losing your Job People got desperate for Money

Intercompany dept. reductions: Training, HR, Safety and Risk Management reduced in size

Employee devaluation: No value on employee’s worth. Increased internal fraud: Employees lack“skin-in-the-

game” Higher deductibles on health insurance: Or no

health insurance offered. Employees turn to workers’ compensation.

Reduced full time employees: Part-time means employees no vacation time. Employee might use workers’ comp as vacation.

Opportunist vs. Habitual Criminal Organized crime rings get into companies

too.- Know who you’re hiring- Due diligence is important

Identify the “fraudster” in your industry- Stay connected - who are the organized crime rings?

Open risk holes (vulnerability points) can happen anytime

Evaluate internal controls for potential weakness

Understand business process flow –front to back

Open communication Stronger Emphasis on Ethics and Integrity

Worker’s Compensation Fraud – Under reporting payroll and paying

employees in cash (avoid paying taxes and insurance premiums.)

Changing ownership / starting under new name - Lower premiums. New businesses with little substantiated business history (due diligence).

Employees don’t report injuries - They need the job, so they continue to work injured, causing more permanent injury later.

Organized crime rings – Offer money to workers for workers

compensation fraud. Labor brokering. (Shell Companies) Lower paying jobs go to illegals – Companies bid on

jobs at lower rate. Illegals are pushed to do unsafe jobs. 3rd generation workers compensation fraud – “learned

behavior” handed down by generations in the family.

“Operation Dirty Money”

Typically involves:1. The creation of shell company (new

business)2. Fake owners 3. Check cashing stores4. Use of illegal workers 5. Multiple people involved in the scam (an

agent, GC, Foreman, Runners)

Bidding System – Construction Industry 1.Very competitive market2.Jobs go out for bid – lowest gets the job 3.Cost of Materials don’t change - unless stolen4.Lower wages - below minimum wage5.Pay cash to workers

Form a shell company Hire undocumented workers Pay workers in cash Don’t pay unemployment tax to the State of

Florida Don’t pay insurance premiums – workers’

compensation

1. Facilitator: Recruits individual or “nominee owner” to incorporate the company online with the Division of Corporations website. **Holds the COI – for uninsured subcontractors

2. Agent / Broker: Gives shell company a w/c insurance policy (adding people as workers on the policy)

3. Labor Brokers: Modern day slave laborers. Have a group of people to take to jobsites - (10 to 400 people)

4. Runners: Pick up and take workers to jobsites

General Contractor: at the job site COI – Certificate of Insurance

6. Foremen: Supervisor at the job site

7. Money Handler: Brings the “cash” on payday for workers – or runs through check cashing store

GC hold COI for shell company Uninsured subcontractor works for shell

company GC gets a piece of the payroll from every

undocumented worker Workers don’t know who they work for Common for 7 - 20 crews working under the

same shell company name in various locations throughout the state

Facilitator will have Pay Day transaction at the check cashing store, making workers sometimes go to that place to get paid under the “shell” company.

Kickbacks are paid to all “players” in scam (agent, runners, GC, foreman, etc.)

1. Facilitator uses fake name or person

who is out-of-the-country. Makes owner of shell company impossible to find.

2. Subcontractors of shell companies not recorded so you won’t find their payroll.

3. Cost of Materials used – doesn‘t match the labor to install the materials.

New Venture Location for business is a house or mailbox drop Likes to use initials in the name of the company Use INC. vs. LLC Use name of company like “construction” or

“contractors” Premium less $10k Less than 10 employees Agents – No loss letters and resumes of owners

identical DOB and SS# of owners not on Accord Agent did not secure copies of Identification Agent didn't’t keep records of COI’s issued Similar Hyphenated names Often cancels and reinstates

If it looks like a duck and sounds like a duck…

chances are it’s a duck!

SWIFT

WORKING 

ASSESSMENT with

RAPID

METHODOLOGY

The SWARM – All hands on deck beginning of claim “sense of urgency” Integrated Team Approach – No silo’s, all departments free flow of

information. (Including loss control and premium audit interaction) Team of experts - beginning of claim all help set up claim properly Move rapidly after initial assessment Identify Subrogation, Mitigation, Compensability, and critical evidence Set reserves appropriately Human factor – injured workers and family Proper medical care to the injured worker Closes the claim faster – Shorter legacy time Lowered Combined ratio – 98.4%, with industry standard being 115% Always evaluating “process flow”

Secret Sauce – The SWARMSecret Sauce – The SWARM

Loss ControlReview injury and illness prevention plan (IIPP)Safety Program AuditPreventative loss analysis and improvement planSpecific Consulting on loss consulting compliance and regulatory safety issues (training)

SIUDue Diligence completed on insured, OSHA violationsClaims InvestigationsWas there any on-site video taken or pictures that might help auditor?

Our Risk Improvement Plan include but not limited to: Contego’s SWARM - integrated team response to cost containmentRapid response – 60% fewer open claims and reduced claims costSafety Incentive Programs – “NASCAR Ready”Enterprise Risk Analysis - customized training modules for company and guidance on MVR StandardsRisk Incentive Programs - “wellness component” - ergonomic operations On-Site Loss Control Inspections - Preventative Loss Analysis & ImprovementCompliance Assistance & Regulatory Safety TrainingReview Injury and Illness Prevention Plan (IIPP)

Establish stronger business relationships - Pay attention who your doing business with

Improve vendor controls - vendor performance management, and vendor best practices (Obtaining Certificates of Insurance)

Evaluate internal controls - outside consultants – Second set of eyes.

Two-step process – money controls Network in your industry - who is targeting your industry Risk Steering Committee - involve all departments – (HR,

Legal, Compliance, Risk Management, Internal Audit) Open Risk Impressions – employee can submit – open door

policy Tighten hiring practices

Better pre-employment - background checks, Social Media checksLet employees be part of the solution – “skin-in-the-game”Integrated Team Approach – No Silo ManagementUnderstand the business process - look at all your vulnerability pointsReward top performersEncourage health and wellnessHave open door - reporting injuries, fraud, and wasteManagers assessable to employees – open doorFraud poster break rooms – Emphasis on INTEGRITY - fraud hotline Safety programs - encourage all employees to have “eyes of safety”Offer Safety Incentive Programs

Safe to report injuriesEncourage open reporting - onset of injury (delays cost large dollars)Return to Work Program – help them get back to workRegular safety meetings - ask for employee inputFraud and waste talks – how each employee can helpEmployee recognition - Big Idea ProgramOpen communication talks - dis-spell employee fearsDefined goals - accountability standards with performance incentives

Initial Assessment Fraud Compliance Course Test and Certification of Completion Compliance Manual Employment Protocols: (code of ethics and background

checks) 24-Hour Fraud Hotline Service Posters and other Fraud Related Material Annual Compliance Audit Certification of Compliance Integrity

SIU and Fraud investigation Investigative services SWARM-Link™ and SWARM-Net™

Contego Due Diligence Verification System

Subrogation recovery Loss Control and Safety Transportation and Translation Medical Fraud Waste Abuse Legal Bill Review – Legal Support

Services

SWARM-Link™

SWARM-Net™

Social media monitoring - Business reputation management

SIU and Subrogation - daily FROI reviewsCAT Claims - immediate “triaging” from SIU to dispatch, Activate expert field investigators (360 degree video)Immediate review process – mitigate, investigate, subrogate

400 years of experience Includes Loss Control, and Premium Audit

Action plan analysis - as information comes in. Includes Loss Control and Premium Audit InputProven track record (5+ years) - Help claims departments close claims the quickest amongst competitors.Proven results - lower the insurance company’s combined ratio Beating the industry standard

Questions?Questions?

www.ContegoServicesGroup.comwww.ContegoServicesGroup.com1-855-WE-SWARM1-855-WE-SWARM