California is one of only two states (the other state is Illinois) with a qui tam statute that addresses fraud against private insurers. The California Insurance Frauds Prevention Act allows whistleblowers to file private qui tam suits against anyone who commits insurance fraud in the state. The statute works much like the federal False Claims Act.
Whistleblower cases brought under the California Insurance Frauds Prevention Act are investigated by either a district attorney or the California Insurance Commissioner. If the government decides to join in the case, the prosecutor will work with the whistleblower and the whistleblower’s attorneys to resolve the case. If the government declines to join, the whistleblower may continue to litigate the case.
In cases where the government intervenes in the case, the whistleblower is eligible for an award of between 30% and 40% of the government’s recovery. When the government does not intervene, the whistleblower may receive between 40% and 50% of the recovery.
