Chapter 3999: CRIMES RELATING TO INSURANCE

3999.01 [Repealed].

Effective Date: 01-01-1974

3999.02 False statement by medical examiner of insurance company.

No medical examiner for a life insurance company or for an applicant for insurance therein shall knowingly make a false statement or report to such company or to an officer thereof concerning the health or physical condition of an applicant for insurance, or other matter or thing affecting the granting of such insurance.

Effective Date: 10-01-1953

3999.03 Life insurance - official or agent issuing fraudulent policies.

No trustee, officer, agent, or employee of a corporation, company, or association organized to transact the business of life or accident or life and accident insurance on the assessment plan shall knowingly insure a person, or permit him to be insured without that person's knowledge or consent, or insure a fictitious person, a person over sixty-five or under fifteen years of age, or a sickly or infirm person.

No physician or other person shall knowingly aid or abet any person in effecting insurance described in this section, or in effecting insurance of his own life.

Effective Date: 10-01-1953

3999.04 Changing life insurance policy.

No life insurance company doing business in this state, or an agent thereof, shall make a contract of insurance, or an agreement as to such contract, other than is plainly expressed in the policy issued thereon.

Effective Date: 10-01-1953

3999.05 Rebates and other inducements from life insurance companies.

No life insurance company doing business in this state, or an officer, agent, solicitor, or representative thereof, shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance, a rebate of the premium payable on a policy, or a special favor or advantage in the dividends or other benefits to accrue thereon, or a paid employment or contract for services of any kind, or any valuable consideration or inducement not specified in the policy of insurance, or give, sell, or purchase, or offer to give, sell, or purchase, as an inducement for insurance, any stocks, bonds, or securities of an insurance company or other corporation, association, or partnership, or any dividends or profits to accrue thereon, or anything of value not specified in the policy.

Effective Date: 10-01-1953

3999.06 [Repealed].

Effective Date: 01-01-1974

3999.07 Sale or assignment of premium note before delivery of policy.

No person, having accepted a premium note in payment of the purchase price of a policy of insurance, shall sell or assign such note prior to the delivery and acceptance of such policy.

Effective Date: 10-01-1953

3999.08 Misrepresentations in soliciting insurance.

No person for himself or as an officer, director, agent, solicitor, or representative of any insurance company, except fire insurance companies or associations or fraternal benefit societies, doing business in this state, shall issue, circulate, or cause or permit to be issued or circulated any estimate, illustration, circular, or statement of any sort misrepresenting the terms of the policy issued or to be issued by such company or the benefits or advantages promised thereby or the dividends or shares or surplus to be received thereon. No person shall use any name or title of any policy or class of policies misrepresenting the true nature thereof, or make, circulate, use, or cause to be made, circulated, or used, any illustration, circular, or statement, whether written or oral, misrepresenting the terms of any policy issued by any such corporation, or the benefits or advantages promised thereby, or any misleading estimate of the dividends or shares of surplus to be received therefrom. No person shall make any misleading representations or incomplete comparison of policies or certificates of insurance to any person insured in any such corporation for the purpose of inducing or tending to induce such person to lapse, forfeit, or surrender his said insurance. Fines collected for violations of this section shall be paid to the county treasurer for the use of the schools as provided in sections 3315.31 and 3315.32 of the Revised Code.

Upon any such conviction the superintendent of insurance shall revoke, for not more than one year, the license of the person, firm, corporation, or association so offending. The superintendent, when he is of the opinion that any company or association writing life insurance in this state, on any plan, is knowingly permitting any of its agents to violate this section, shall give such company or association reasonable notice of a hearing upon the charge of knowingly permitting this section to be violated, and if he finds said company or association guilty of the offense, he shall revoke its license.

Effective Date: 10-01-1953

3999.09 False or malicious statements about insurance company.

No company doing business in this state, or any officer, director, clerk, employee, or agent thereof, shall make, orally or otherwise, publish, print, distribute, or circulate, or cause the same to be done, or aid, abet, or encourage the making, printing, publishing, distributing, or circulating of, any pamphlet, circular, article, literature, or statement of any kind which is defamatory of any insurance company doing business in this state, or which contains any false and malicious criticism or false and malicious statement calculated to injure such company in its reputation or business. No officer, director, clerk, employee, or agent of any company shall violate this section.

Effective Date: 10-01-1953

3999.10 Misrepresentations in advertisement by insurance company.

No insurance company, corporation, or association authorized to transact business in this state, or an agent thereof, by advertisement in a newspaper, magazine, or periodical or by a sign, circular, card, policy of insurance, certificate, or renewal thereof, or otherwise, shall state or represent that funds or assets are in its possession, not actually possessed by it and available for the payment of losses and claims and held for the protection of its policyholders or creditors, or advertise a subscribed capital not actually paid up in cash.

Effective Date: 10-01-1953

3999.11 Advertisement at variance with verified statement.

No insurance company, corporation, or association authorized to transact business in this state shall purport to make known its financial standing by advertisement, public announcement, or by making or issuing a circular or card, which fails to correspond, in all the particulars which it so purports to make known, with the last preceding verified statement made by it to the insurance department of any state.

Effective Date: 10-01-1953

3999.12 Disbursements by domestic life insurance companies.

No domestic life insurance company making a disbursement of one hundred dollars or more shall fail to have it evidenced by a voucher signed by or on behalf of the person, firm, or corporation receiving the money and correctly describing the consideration thereof; if such expenditure is for both services and disbursements, such company shall not fail to set forth in such voucher, the service rendered and an itemized statement of the disbursement made; if such expenditure was in connection with a matter pending before a legislative or public body or a department or officer of any state or government, in addition to the foregoing information, such corporation shall not fail to describe correctly in such voucher the nature of the matter and of the interest of such company therein.

If such voucher cannot be obtained, such expenditures must be evidenced by an affidavit describing the character and object of the expenditure and stating the reasons for not obtaining such voucher.

Effective Date: 10-01-1953

3999.13 Unlawful reinsurance.

No officer, director, or stockholder of a company organized under the laws of this state to do the business of life, accident, or health insurance, either on the stock, mutual, stipulated premiums, assessment, or fraternal plan, shall violate or consent to a violation of any law governing or forbidding the reinsurance of the risks, or any part thereof, or the consolidation of such company with any other company or association, or the assumption of reinsurance of the whole or any portion of the risks of another company by such company.

Effective Date: 10-01-1953

3999.14 Foreign life insurance companies on the assessment plan.

No officer or agent of a corporation, company, or association organized under the laws of any other state of the United States to transact the business of life or accident insurance or life and accident insurance on the assessment plan, shall violate or fail to comply with any law relating to such corporation, company, or association.

Effective Date: 10-01-1953

3999.15 Violations by accident insurance companies and officers thereof.

No company organized under the laws of this state for the special purpose of insuring against accidental personal injury and loss of life sustained while traveling by railroad, steamboat, or other mode of conveyance, against accidental personal injury and loss of life sustained by accident of every description, and against expenses and loss of time occasioned by injury or sickness, on such terms, and for such periods of time, and confined to such countries and localities and to such persons as from time to time may be provided in the bylaws of such company, or any officer of such company, shall violate any law relating to such company.

Effective Date: 10-01-1953

3999.16 Handicapped persons - unfair discrimination.

No officer, director, trustee, agent, or employee of any insurance company, corporation, or association authorized to transact business in this state shall knowingly use underwriting standards or rates that result in unfair discrimination against any handicapped person. This section does not prevent reasonable classifications of handicapped person for determining insurance rates.

As used in this section, "handicapped" means a medically diagnosable, abnormal condition which is expected to continue for a considerable length of time, whether correctable or uncorrectable by good medical practice, which can reasonably be expected to limit the person's functional ability, including but not limited to seeing, hearing, thinking, ambulating, climbing, descending, lifting, grasping, sitting, rising, any related function, or any limitation due to weakness or significantly decreased endurance, so that he cannot perform his everyday routine living and working without significantly increased hardship and vulnerability to what are considered the everyday obstacles and hazards encountered by the nonhandicapped.

Effective Date: 07-23-1976

3999.17 [Repealed].

Effective Date: 07-01-1996

3999.18 Requiring valid certificate of authority.

(A) No person shall establish, operate, or maintain any entity that delivers, issues for delivery, or renews any policy of sickness and accident insurance or contract for health care services in this state if the entity is required to, but does not, have a valid certificate of authority under Chapter 1751. or Title IX of the Revised Code.

(B) No insurance agent, broker, or other person shall advertise, solicit, negotiate, collect a premium on, or sell any policy of sickness and accident insurance or contract for health care services in this state unless the entity that delivers, issues for delivery, or renews the policy or contract is subject to and has complied with division (A) of this section.

Effective Date: 07-02-2004

3999.21 Applications and claim form to contain warning against insurance fraud.

(A) As used in this section:

(1) "Deceptive," "insurer," "policy," and "statement" have the same meanings as in section 2913.47 of the Revised Code.

(2) "Defraud" has the same meaning as in section 2913.01 of the Revised Code.

(B) All applications for group or individual insurance issued by an insurer and all claim forms issued by an insurer, for use by persons in applying for insurance or submitting a claim for payment pursuant to a policy or a claim for any other benefit pursuant to a policy, shall clearly contain a warning substantially as follows: "Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud."

(C) An insurer may comply with division (B) of this section by including the warning on an addendum to any application or claim form described in that division, if the addendum is attached to the form and satisfies the requirements set forth in that division.

(D) The absence of a warning as described in division (B) of this section does not constitute a defense in a prosecution for a violation of section 2913.47 or any other section of the Revised Code.

Effective Date: 10-23-1991

3999.22 Health insurance referrals - prohibited activities - exceptions.

(A) As used in this section:

(1) "Claim" means any attempt to cause a health care insurer to make payment of a health care benefit.

(2) "Health care benefit" means the right under a contract or a certificate or policy of insurance to have a payment made by a health care insurer for a specified health care service.

(3) "Health care insurer" means any person that is authorized to do the business of sickness and accident insurance, any health insuring corporation, and any legal entity that is self-insured and provides health care benefits to its employees or members.

(B) No person shall knowingly solicit, offer, pay, or receive any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, in return for referring an individual for the furnishing of health care services or goods for which whole or partial reimbursement is or may be made by a health care insurer, except as authorized by the health care or health insurance contract, policy, or plan. This division does not apply to any of the following:

(1) Deductibles, copayments, or similar amounts owed by the person covered by the health care or health insurance contract, policy, or plan;

(2) Discounts or similar reductions in prices;

(3) Any amount paid within a bona fide legal entity, or within legal entities under common ownership or control, including any amount paid to an employee in a bona fide employment relationship;

(4) Any amount paid as part of a bona fide lease, management, or other business contract.

(C) Nothing in this section shall be construed to apply to any of the following:

(1) A provider who provides goods or services requested by an individual that are not covered by the individual's health care or health insurance contract, policy, or plan;

(2) A provider who, in good faith, provides goods or services ordered by another health care provider;

(3) A provider who, in good faith, resubmits a claim previously submitted that has not been paid or denied within thirty days of the original submission, if the provider notifies the payor or returns any duplicate payment within sixty days after receipt of the duplicate payment;

(4) A provider who, in good faith, makes a diagnosis that differs from the interpretation of a diagnosis reached by a health care insurer in the payment of claims.

(D) Whoever violates this section is guilty of a felony of the fifth degree on a first offense and a felony of the fourth degree on each subsequent offense.

Effective Date: 03-22-1999

3999.23 to 3999.25 [Repealed].

Effective Date: 07-18-1990

3999.31 Immunity for providing or receiving information relating to suspected fraudulent insurance acts.

(A) As used in this section:

(1) "Fraudulent insurance act" means an act committed by a person who, knowingly and with intent to defraud, presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, purported insurer, broker, or any agent thereof, any written statement as part of, or in support of, an application for the issuance of, or the rating of a policy or contract for property insurance, casualty insurance, life insurance, sickness and accident insurance, or an annuity, or a claim for payment or other benefit pursuant to such a policy or contract, that the person knows to contain materially false information concerning any fact material thereto, or conceals, for the purpose of misleading, information concerning any fact material thereto. "Fraudulent insurance act" also includes any such written statement, claim, or concealment in relation to such an insurance policy or contract that constitutes a criminal offense under Title XXIX [29] or XXXIX [39] of the Revised Code.

(2) "Person" includes, but is not limited to, the superintendent of insurance, the national association of insurance commissioners, any insurer, any organization established to detect or prevent fraudulent insurance acts, and any officer, director, trustee, representative, agent, broker, or employee of the superintendent, association, insurer, organization, or person.

(B) In the absence of fraud or bad faith, no person is subject to liability for damages or any other civil liability for libel, slander, or other relevant tort cause of action by virtue of filing reports, without malice, or furnishing other information, without malice, required under Title XXXIX [39] of the Revised Code or required by the superintendent under authority granted by that title, and no liability for damages or any other civil cause of action of any nature arises against a person for providing or receiving information relating to suspected fraudulent insurance acts that is furnished to or received from any of the following:

(1) Any law enforcement official, or any agent or employee of such official;

(2) Other persons subject to the provisions of Title XXXIX [39] of the Revised Code;

(3) The superintendent and any designee of the superintendent, any insurance frauds bureau, the national association of insurance commissioners, or any organization established to detect and prevent fraudulent insurance acts;

(4) Any other person involved in the detection or prevention of fraudulent insurance acts.

(C) The superintendent and any designee of the superintendent, or any insurance frauds bureau, in the absence of malice, fraud, or bad faith, is not subject to civil liability for libel, slander, or other relevant tort and no civil cause of action of any nature arises against such a person by virtue of the publication of any report or bulletin related to the official activities of the superintendent or of any insurance frauds bureau in relation to fraudulent insurance acts.

(D) Nothing in this section is intended to abrogate or modify in any way any common law or statutory privilege or immunity enjoyed by any person.

(E) Nothing in this section shall be construed to negate, supersede, or otherwise affect section 3911.06 , 3911.07 , 3915.05 , or 3923.04 of the Revised Code.

(F) This section may be cited as the conference of insurance legislators/national association of insurance commissioners model immunity act.

Effective Date: 03-17-1998

3999.32 Notice of failure to make required premium payment or contribution.

(A) As used in this section:

(1) "Certificate holder" means any person whose employment or retirement status is the basis of eligibility for coverage under a group policy of sickness and accident insurance or for enrollment under a group contract of a health insuring corporation.

(2) "Health insurer" means any sickness and accident insurer or health insuring corporation.

(B) Each person to whom a group policy or contract of sickness and accident insurance or other health care coverage has been delivered or issued for delivery in this state by a health insurer shall make a reasonable effort to notify every certificate holder, or certificate holder's designee, who is covered under that policy or contract whenever the person fails to make a required premium payment or contribution on behalf of the certificate holder and that failure results in the termination of coverage. The person shall mail or present the notice to the certificate holder or certificate holder's designee no later than five days after the date on which the person receives the notice from the health insurer as required under division (D) of this section. If a person other than the policyholder or contract holder is obligated to make the required premium payment or contribution on behalf of the certificate holder, that person shall mail or present the notice as required by this section.

(C) The notice required by division (B) of this section shall be in writing and shall clearly state that the person failed to make the required premium payment or contribution, the reasons for the failure, and the effect of the failure on the coverage of the certificate holder under the policy or contract.

(D) If a person described in division (B) of this section fails to make a required premium payment or contribution on behalf of a certificate holder and that failure results in the termination of the coverage, the health insurer providing the coverage shall notify the person in writing of that person's duties as described in divisions (B) and (C) of this section. If a person other than the policyholder or contract holder is obligated to make the required premium payment or contribution on behalf of the certificate holder, the insurer shall notify the person in writing of that person's duties as described in divisions (B) and (C) of this section.

(E) A certificate holder may designate any person to receive on the certificate holder's behalf the notice required by division (B) of this section. The certificate holder shall furnish the name and address of the person so designated to the person to whom the group policy or contract has been delivered or issued for delivery.

(F) No person shall knowingly fail to comply with division (B) or (C) of this section.

Effective Date: 06-04-1997

3999.36 Notice of impairment to be given by chief executive.

(A) As used in this section and sections 3999.37 and 3999.38 of the Revised Code:

(1) "Insurer" means any person that is authorized to engage in the business of insurance in this state under Title XXXIX [39] of the Revised Code, any health insuring corporation, or any other person engaging either directly or indirectly in this state in the business of insurance or entering into contracts substantially amounting to insurance under section 3905.42 of the Revised Code.

(2) "Impaired" or "impairment" means a financial situation in which the insurer's assets are less than the sum of the insurer's minimum required capital, minimum required surplus, and all liabilities, as determined in accordance with the requirements for the preparation and filing of the insurer's annual financial statement.

(3) "Chief executive officer" means the person, irrespective of the person's title, designated by the board of directors or trustees of an insurer as the person charged with the responsibility of administering and implementing the insurer's policies and procedures.

(B) Whenever a chief executive officer of an insurer knows or has reason to know that the insurer is impaired, the chief executive officer shall provide written notice of the impairment to the superintendent of insurance and to each member of the board of directors or trustees of the insurer. The chief executive officer shall provide the notice as soon as reasonably possible, but no later than thirty days after the chief executive officer knows or has reason to know of the impairment. No chief executive officer shall fail to provide notice in compliance with this division.

(C) The notice received by the superintendent under division (B) of this section is confidential and is not a public record under section 149.43 of the Revised Code.

(D) Notwithstanding division (C) of this section, the superintendent may do any of the following:

(1) Disclose the notice upon obtaining prior written consent from the insurer to which the notice pertains;

(2) Share the notice that is the subject of this section with the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, with other local, state, federal, and international regulatory and law enforcement agencies, with local, state, and federal prosecutors, and with the national association of insurance commissioners and its affiliates and subsidiaries, provided that the recipient agrees to maintain the confidential status of the notice and has authority to do so;

(3) Disclose the notice in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent or the state, resulting from the exercise of the superintendent's official duties.

(E) Notwithstanding divisions (C) and (D) of this section, the superintendent may authorize the national association of insurance commissioners and its affiliates and subsidiaries by agreement to share confidential notices received pursuant to division (D)(2) of this section with local, state, federal, and international regulatory and law enforcement agencies and with local, state, and federal prosecutors, provided that the recipient agrees to maintain the confidential status of the notice and has authority to do so.

(F) Notwithstanding divisions (C) and (D) of this section, the chief deputy rehabilitator, the chief deputy liquidator and other deputy rehabilitators and liquidators may disclose notices in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent, the rehabilitator, the liquidator, or the state resulting from the exercise of the superintendent's official duties in any capacity.

(G) Nothing in this section shall prohibit the superintendent from receiving notices in accordance with section 3901.045 of the Revised Code.

(H) The superintendent may enter into agreements governing the sharing and use of notices consistent with the requirements of this section.

(I)

(1) No waiver of any applicable privilege or claim of confidentiality in the notices that are the subject of this section shall occur as a result of sharing or receiving notices as authorized in divisions (D)(2), (E), and (G) of this section.

(2) The disclosure of a notice in connection with a regulatory or legal action pursuant to divisions (D)(3) and (F) of this section does not prohibit an insurer or any other person from taking steps to limit the dissemination of the notice to persons not involved in or the subject of the regulatory or legal action on the basis of any recognized privilege arising under any other section of the Revised Code or the common law.

Effective Date: 06-18-2002

3999.37 Prohibiting fraudulent acts concerning impairment or insolvency of insurer.

No person shall do any of the following:

(A) Conceal any property belonging to an insurer;

(B) Transfer or conceal his own property or property belonging to an insurer in contemplation of a proceeding under Chapter 3903. of the Revised Code;

(C) Conceal, destroy, mutilate, alter, or make a false entry in any document that affects or relates to the property of an insurer;

(D) Withhold any document that affects or relates to the property of an insurer from a receiver, trustee, or other officer of a court entitled to its possession;

(E) Give, obtain, or receive anything of value for acting or forbearing to act in any judicial proceeding, if the act results in or contributes to the impairment or insolvency of any insurer.

Effective Date: 08-08-1991

3999.38 Prohibiting payment of dividend when insurer is impaired.

No insurer shall knowingly declare or pay any dividend whenever the insurer is impaired. For purposes of this section, "insurer" also includes any person doing the business of insurance in this state.

Effective Date: 08-08-1991

3999.41 Insurer to adopt antifraud program.

(A) Except as provided in division (D) of this section, every insurer, as defined in division (A) of section 3999.36 of the Revised Code, shall adopt an antifraud program and shall specify in a written plan the procedures it will follow when instances of insurance fraud or suspected insurance fraud are brought to its attention. The insurer shall identify in the written plan the person or persons responsible for the insurer's antifraud program.

(B)

(1) An insurer shall develop a written plan required by division (A) of this section within ninety days after obtaining its license to transact business within this state or within ninety days after beginning to engage in the business of insurance within this state and shall thereafter maintain such a written plan.

(2) An insurer engaged in the business of insurance within this state on the effective date of this section shall develop a written plan required by division (A) of this section within ninety days after the effective date of this section and shall thereafter maintain such a written plan.

(C) If an insurer modifies the procedures it follows for instances of insurance fraud or suspected insurance fraud, or if there is a change in the person or persons responsible for the insurer's antifraud program, the insurer shall modify the written plan it maintains pursuant to this section.

(D) The requirements of this section are not applicable to any insurer identified in division (A) of this section that is not engaged in writing direct insurance in this state.

Effective Date: 03-17-1998

3999.42 Insurer to notify department of insurance fraud.

(A) If an insurer, as defined in division (A) of section 3999.36 of the Revised Code, has a reasonable belief that a person is perpetrating or facilitating an insurance fraud, as established by section 2913.47 of the Revised Code, or has done so, the insurer shall notify the department of insurance.

(B) The notification required by division (A) of this section shall be made in accordance with rules adopted by the department of insurance.

(C) Division (A) of this section does not require notification of the department of insurance if the insurance fraud involves a claim of an amount less than one thousand dollars.

(D) This section applies to insurance fraud perpetrated or facilitated by any person, including, but not limited to, any applicant, policyholder, subscriber, or enrollee, or any officer, director, manager, employee, representative, or agent of the insurer.

Effective Date: 03-17-1998

3999.99 Penalty.

(A) Whoever violates section 3999.02 of the Revised Code is guilty of a misdemeanor of the second degree.

(B) Whoever violates section 3999.03 , 3999.07 , 3999.13 , 3999.14 , or 3999.15 of the Revised Code is guilty of a misdemeanor of the first degree.

(C) Whoever violates section 3999.04 , 3999.05 , 3999.08 , or 3999.09 of the Revised Code is guilty of a misdemeanor of the fourth degree.

(D) Whoever violates section 3999.10 or 3999.11 of the Revised Code shall be fined five hundred dollars for a first offense and shall be fined one thousand dollars for each subsequent offense.

(E) Whoever violates section 3999.12 of the Revised Code shall be fined not less than ten nor more than one thousand dollars.

(F) Whoever violates division (F) of section 3999.32 , division (B) of section 3999.36 , or section 3999.37 or 3999.38 of the Revised Code is guilty of a felony of the fourth degree.

(G) Whoever violates division (A) of section 3999.18 of the Revised Code is guilty of a felony of the fourth degree.

(H) Whoever violates division (B) of section 3999.18 of the Revised Code is guilty of a misdemeanor of the first degree on a first offense and a felony of the fifth degree on each subsequent offense.

(I) If a person is found guilty under this section, the court may award restitution in accordance with section 2929.18 of the Revised Code.

Effective Date: 07-02-2004