The California Insurance Frauds Prevention Act (IFPA) is designed to combat fraud committed against insurers by individuals, organizations and companies. The IFPA allows the local district attorney or the Insurance Commissioner for the State to intervene in and control the lawsuit.

Therefore, a civil lawsuit can be prosecuted without the allegedly victimized insurance company even being a party, amounting to roughly around $5,000-$10,000 per fraudulent claim and an additional assessment of up to three times the amount of each claim for compensation. Some example of insurance fraud that IFPA covers is:

  • Fraudulent billing or overbilling of health insurance companies by hospitals and medical specialists
  • Billing of auto insurance providers by auto repair shops for services not provided and/or parts not installed
  • Underreporting of total people employed by employers attempting to lower workers’ compensation insurance rates
  • Submitting multiple insurance claims for the same service rendered or part replaced
  • Employing “runners, steerers or cappers” to recruit patients or clients

The IFPA allows individuals to sue those who commit insurance fraud covered by California law, but unlike with non-insurance-related false claims, it is not necessary that the government suffer harm as a result of the fraud. The act allows an individual with personal knowledge of insurance fraud to bring a lawsuit for the State of California for insurance fraud, without being directly injured. In other words, individuals who sue fraudulent actors under the IFPA are acting on behalf of themselves and every one of their fellow policyholders as well as for the State of California.

When a complaint is filed, it is sealed with the relevant superior court and the state insurance commissioner has 60 days to decide whether or not to intervene in the case. If either the district attorney or the commissioner decides to intervene, government attorneys may take over and lead the prosecution or they may allow the relator to continue to do so and serve in a supportive role. If this is the case, the relator would be entitled to collect between 30-40% of all recoveries from the defendant.

The State calculates the total recover using the total assets remaining after it has reimbursed both the relator and itself for reasonable attorneys’ fees, costs and expenses incurred during the case. The relator could also proceed with the case alone if the government decides not to intervene. If the court decides that the relator’s case is based primarily on information that was already publicly available, the relator would only stand to receive a maximum of 10% of recovery.

Employees who suffer discrimination as a result of their involvement in an IFPA action and wish to pursue damages for their injuries must file suit within 3 years or after they discover the facts. For more information, make sure to consult an experienced attorney who can help you through the process.


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Call Wing & Parisi at (916) 441-4888.

Contact us online or call at (916) 441-4888 for a free and confidential initial consultation, available in Spanish. We appear in state and federal courts in the Sacramento and Davis communities as well as throughout Placer and San Joaquin counties.

Linda Parisi
Law Office of Wing & Parisi
917 G Street
Sacramento,CA,95814, USA
(916) 441-4888

The Law Office of Wing & Parisi serves clients in the Sacramento and Davis communities as well as throughout Placer County and San Joaquin County. Hablamos espanol.