What is the consequence of failing to report a fraudulent claim within the specified time frame?

The correct consequence of failing to report a fraudulent claim within the specified time frame is that it can indeed lead to penalties. Reporting fraudulent claims is critical for maintaining the integrity of the insurance system. If an individual does not report a fraudulent claim as required, they may face penalties such as possible fines or other disciplinary actions from insurance authorities.

Penalties are designed to deter individuals from allowing fraudulent activity to go unreported, which can lead to greater consequences for the insurance system as a whole. The emphasis on timely reporting helps ensure that fraud is addressed quickly and reduces the potential for financial harm to insurers and honest policyholders.

In the context of the options provided, the notion that there would be "no penalty" for failing to report within the required time frame is inaccurate, as it overlooks the importance of compliance with insurance regulations and the potential repercussions for not adhering to them.