Lungren, 091696 CAAGO, AGO 96-212

Docket Nº:AGO 96-212
Case Date:September 16, 1996
Court:California
 
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DANIEL E. LUNGREN Attorney General
CLAYTON P. ROCHE Deputy Attorney General
AGO 96-212
No. 96-212
California Attorney General Opinion
Office of the Attorney General State of California
September 16, 1996
         THE HONORABLE CHUCK QUACKENBUSH, INSURANCE COMMISSIONER, has requested an opinion on the following question:          May investigators employed in the fraud division of the Department of Insurance issue administrative subpoenas to obtain evidence or testimony during criminal investigations being conducted by the Department of Insurance?          CONCLUSION          Investigators employed in the fraud division of the Department of Insurance may issue administrative subpoenas to obtain evidence or testimony during criminal investigations being conducted by the Department of Insurance; however, if a person is compelled to testify after claiming his privilege against self-incrimination, immunity from criminal prosecution must be granted concerning the matter.          ANALYSIS          The Department of Insurance ("Department") is charged with enforcing laws prohibiting insurance fraud. Section 1872 of the Insurance Code1 provides:
"There is created within the department a Bureau of Fraudulent Claims to enforce the provisions of Section 1871.4 of this code, and Sections 549 and 550 of the Penal Code, and to administer the provisions of Article 3 (commencing with Section 1873)."
"Section 1871.4" relates specifically to workers' compensation fraud, which it makes unlawful. "Sections 549 and 550 of the Penal Code" cover all types of insurance fraud, making such acts unlawful. "Article 3" (§§ 1873-1873.4) concerns the reporting of insurance fraud to government agencies.          The question presented for resolution concerns the powers of Department investigators who are responsible for enforcing the insurance fraud statutes. May they issue subpoenas to obtain evidence or testimony when conducting a criminal investigation? We conclude that they may; however, immunity from criminal prosecution must be given to anyone whose testimony is compelled after claiming his privilege against self-incrimination.          The two statutes requiring our analysis are sections 1872.3 and 12924. Section 1872.3 provides with respect to the Bureau of Fraudulent Claims:
"(a) If, by its own inquiries or as a result of complaints, the Bureau of Fraudulent Claims has reason to believe that a person has engaged in, or is engaging in, an act or practice that violates Section 1871.4 of this code, or Section 549 or 550 of the Penal Code, the commissioner in his or her discretion (1) may make those public or private investigations within or outside of this state that he or she deems necessary to determine whether any person has violated or is about to violate any provision of Section 1871.4 of
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