re: "The software triggered an immediate fraud investigation"

Insurance production and marketing is regluated in and by each of the several states. Definitions of "fraud" as pertains to enforceability of the contract differentiate obligations of the counterparties, issuer and insured. In some respects the Patient Protection and Affordability Act seeks to unify formally states' statutes by affirming federal authority and establishing minimum standards of liability according to USC.

In general,

Insured may not...
knowingly present an insurer documentation or communication in support of a claim that contains false or misleading information concerning a matter material to a claim or an insurance application

Issuer may not...
misrepresent pertinent facts or policy provisions that relate to a claim or coverage at issue or in dispute. Fraudulent acts are

• knowingly fail to return to an insured money or premiums paid for a policy not ultimately provided
  
• knowingly make a false statement in reference to any insurance application
  
• willfully collect as an insurance premium a sum in excess of the premium applicable to the insurance
  
• misappropriate or withhold unreasonably funds received that represent premiums or benefits
  
• act as an insurance producer, broker, or adjuster without appropriate license
  
• place insurance with an insurer not regulated by the state
  
• refuse an order by a state commissioner to produce for examination all policies and other documentation evidencing the insurance and premium amounts paid

"Unfair discrimination" is illegal but not necessarily a fraudulent act: It is illegal to discriminate unfairly between individuals of the same class and life expectancy for the rates charged, dividends, other benefits payable, and any other condition of life insurance or life annuity contract.

To be "fair," issuer's treatment of one is applicable to all individuals of the same class and life expectancy.

disclosure

Diversity is the key to economic and political evolution.