Can a bank continue collection efforts on a defaulted loan when a SAR is filed due to fraudulent activity and the subject/customer is attempting to commit insurance fraud by submitting false claims on the business equipment.

There is absolutely no relationship between the two events.

How about if they attempt to repay the bank with any insurance proceeds they may get?

What and how you decide to accept payments after default and what any risk might be if you suspect that the funds are coming from an illegal source is a matter that you need to address with your legal counsel.

It still has nothing to do with filing a SAR.