Last reviewed: 17 September 2026
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When an insurance agent is legally required to report suspected fraud
Our explainer on the duty to self-report covers what a producer has to tell their regulator about their own administrative or criminal exposure. This is the duty that runs the other way: in most states, a licensed producer who has reason to suspect fraud by someone else — a claimant, an applicant, another producer — has their own separate, statutory obligation to report it, backed by a specific legal immunity designed to make reporting worth doing.
The model behind most states' version
The NAIC Insurance Fraud Prevention Model Act (#680) is built around two paired provisions. Section 6, "Mandatory Reporting of Fraudulent Insurance Acts," requires a person engaged in the business of insurance who has knowledge or a reasonable belief that a fraudulent insurance act is being, will be, or has been committed to provide that information to the commissioner. Section 7, "Immunity from Liability," bars a civil cause of action from arising against a person for furnishing that information in good faith to the appropriate authorities. The model act's own definition of "insurance representative" names an agent acting on an insurer's behalf directly, and most states adopting their own version write the covered class more broadly still, adding brokers and other insurance professionals by name.[1]
How specific states actually write the producer's duty
Virginia's version is direct about who it covers: Va. Code § 52-36 defines "insurance professional" to include agents, brokers, managing general agents, and adjusters, and § 52-40 requires any such person with knowledge of, or reason to believe in, a suspected fraudulent act to "furnish and disclose any information in his possession concerning the fraudulent act" to the Department — Virginia's insurance-fraud reports run through the Department of State Police's own Insurance Fraud Program under Title 52, a separate track from the Bureau of Insurance that licenses and regulates producers under Title 38.2.[2] New York's Insurance Law § 405(a) reaches "any person licensed or registered" under the state's insurance laws — which includes a producer directly — requiring a report to the superintendent within 30 days of determining a transaction appears fraudulent, with real factual detail behind it rather than a bare label.[3] California's version runs through the insurer's special investigative unit rather than requiring an individual producer to report directly: once an insurer's SIU determines it reasonably suspects fraud, Insurance Code § 1872.4 gives the insurer 60 days to send the state's Fraud Division a report on the required form.[4]
| State (example) | Who the duty reaches | Reporting window |
|---|---|---|
| Virginia | Insurers and "insurance professionals" (agents, brokers, MGAs, adjusters) directly | No fixed number of days stated in the statute — "shall furnish" on developing knowledge or reasonable belief |
| New York | Any person licensed or registered under the insurance law, including producers, directly | 30 days after determining a transaction appears fraudulent |
| California | The insurer, through its special investigative unit — not the individual producer directly | 60 days after the SIU's determination |
That last row matters: not every state's version routes the duty through the individual producer the same way. Some, like Virginia and New York, put the reporting obligation on the producer directly; others, like California, put it on the insurer's own investigative unit, with the producer's role being to cooperate and furnish information rather than file the report personally. Which model your state uses is a specific, checkable fact — not something to assume from another state's rule.
Why the immunity provision matters just as much as the duty
A reporting duty without protection from being sued over it would ask a producer to choose between compliance and personal liability. Virginia's immunity provision, Code § 52-41, says no cause of action "in the nature of defamation, invasion of privacy, or negligence" arises against a person for furnishing suspected-fraud information to the Department, the NAIC, another insurer, or a government fraud-detection entity — with the immunity withdrawn only where the person disclosed false information "with malice or willful intent to injure."[2] That good-faith carve-out is the consistent structure across states that pair a reporting duty with immunity: the protection exists specifically to make the mandatory reporting duty usable in practice, not just theoretical.
What this means for checking a producer
This duty runs in the opposite direction from most of what our standard checks: it's about a producer's obligation to flag someone else's suspected misconduct, not their own. But it connects directly to our standard's fourth point — state DOI disciplinary history checked directly — because a producer who is the subject of a fraud report, rather than the one filing it, is exactly the kind of finding a state DOI enforcement-action search (see our disciplinary-search guide) or NIPR's shared record can surface. The reporting-duty statute and the enforcement-search tool are two ends of the same pipeline: one creates the record, the other lets you check it.
- [1] NAIC, Insurance Fraud Prevention Model Act (#680), Sections 6–7 — content.naic.org/sites/default/files/model-law-680.pdf
- [2] Code of Virginia §§ 52-36, 52-40, 52-41 — law.lis.virginia.gov/vacode/title52/chapter9/
- [3] New York Insurance Law § 405 — codes.findlaw.com/ny/insurance-law/isc-sect-405/
- [4] California Insurance Code § 1872.4 — codes.findlaw.com/ca/insurance-code/ins-sect-1872-4/