Linda Webb speaks at the 2013 NSIPA & IAASE Annual Seminar Learn how the SWARM MODEL can revolutionize and identify cost containment areas in the insurance industry. Working in conjunction with SIU, Premium Audit and Loss Control in an interactive solution during the whole insurance process. Learn how the integrated team approach can help all insurance field staff work together like, i.e. premium auditors, SIU investigators and loss constrol specialist. Activate the SWARM Model today for game-changing solutions. Objectives: Learn how to activate the SWARM MODEL to help your organization. SIU how it works in conjunction with Loss Control and Premium Audit. Fraud investigative techniques to help with premium audit. Identifying deceptive cues during interviews. Power Point Presentation created by Randy Friedman

1. ““SWARM Interaction with Premium Audit”SWARM Interaction with Premium Audit”

3. ““Game changing insurance servicesGame changing insurance services
and cost-containment solutionsand cost-containment solutions””

4. Providing insurance services
across all lines that will
Shield, Protect & DefendShield, Protect & Defend
a company’s investment like no
other!

5. What happened over the last 5
years of a struggling economy?

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

7.  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.

8.  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?

9.  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

10.  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.

11. “Operation Dirty Money”

12. Typically involves:
1. The creation of shell company (new business)
2. Fake owners
3. Check cashing stores
4. Use of illegal workers
5. Multiple people involved in the scam (an agent,
GC, Foreman, Runners)

13. Bidding System – Construction Industry
1.Very competitive market
2.Jobs go out for bid – lowest gets the job
3.Cost of Materials don’t change - unless stolen
4.Lower wages - below minimum wage
5.Pay cash to workers

14.  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

15. 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)

16. 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

17. 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

18.  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

19. 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.)

20. 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.

21.  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

22. If it looks like a duck
and sounds like a duck…
chances are it’s a duck!

23. SWIFT
WORKING
ASSESSMENT with
RAPID
METHODOLOGY

25.  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

26. Loss Control
Review injury and illness prevention plan (IIPP)
Safety Program Audit
Preventative loss analysis and improvement plan
Specific Consulting on loss consulting compliance and
regulatory safety issues (training)
SIU
Due Diligence completed on insured, OSHA violations
Claims Investigations
Was there any on-site video taken or pictures that might help
auditor?

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

28.  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

29. Better pre-employment - background checks, Social Media checks
Let employees be part of the solution – “skin-in-the-game”
Integrated Team Approach – No Silo Management
Understand the business process - look at all your vulnerability points
Reward top performers
Encourage health and wellness
Have open door - reporting injuries, fraud, and waste
Managers assessable to employees – open door
Fraud poster break rooms – Emphasis on INTEGRITY - fraud hotline
Safety programs - encourage all employees to have “eyes of safety”
Offer Safety Incentive Programs

30. Safe to report injuries
Encourage open reporting - onset of injury (delays cost large dollars)
Return to Work Program – help them get back to work
Regular safety meetings - ask for employee input
Fraud and waste talks – how each employee can help
Employee recognition - Big Idea Program
Open communication talks - dis-spell employee fears
Defined goals - accountability standards with performance incentives

31.  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

32.  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

33. SWARM-Link™
SWARM-Net™
Social media monitoring - Business
reputation management

34. SIU and Subrogation - daily FROI reviews
CAT 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 Input
Proven 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

35. Questions?Questions?
www.ContegoServicesGroup.comwww.ContegoServicesGroup.com
1-855-WE-SWARM1-855-WE-SWARM