Colorado Life Producer License Practice Test

Which is NOT a requirement of an anti-fraud plan?

1. Prevent fraud occurrences

2. Conduct employee background checks

3. Educate appropriate employees

4. Report suspected fraud to law enforcement

The correct answer is: Conduct employee background checks

An anti-fraud plan is structured to minimize the risk of fraud and ensure that appropriate measures are in place to detect and manage fraudulent activities. The primary objectives of an effective anti-fraud plan include preventing fraud occurrences, educating employees about fraud awareness and detection, and establishing protocols for reporting suspected fraud incidents. Conducting employee background checks, while a beneficial practice for hiring and maintaining a trustworthy workforce, is not explicitly required as part of an anti-fraud plan. Instead, the focus of an anti-fraud plan is on establishing preventive measures and educational initiatives related to fraud that all employees should understand and implement. Therefore, the emphasis on preventing fraud, educating employees, and reporting incidents to law enforcement aligns with the core requirements of an anti-fraud plan, whereas the requirement to conduct employee background checks falls outside the primary goals of such a strategy.