What is the goal of reporting suspected insurance fraud?

The goal of reporting suspected insurance fraud is to involve law enforcement. By bringing suspected fraudulent activities to the attention of law enforcement agencies, companies and individuals help to ensure that illegal actions are investigated and prosecuted appropriately. This process not only aims to address the specific instances of fraud but also serves to deter future fraudulent activity by reinforcing the consequences of such behavior.

Involving law enforcement can lead to more effective enforcement of insurance laws and regulations, thereby protecting the integrity of the insurance industry as a whole. This action helps to mitigate losses that arise from fraudulent claims, which can ultimately affect the rates consumers pay for insurance and the overall stability of the insurance market.

The other options do not capture the primary objective of reporting suspected fraud. Suspending a producer’s license is a potential consequence of proven fraudulent behavior rather than the goal of reporting. Educating employees is important but serves more as a preventive measure rather than a direct goal of reporting fraud. Lastly, while managing costs is an important aspect of insurance operations, it is not the primary intent behind reporting fraud. The emphasis should be on addressing illegal actions through law enforcement involvement.