Insurance sector in India is one of the booming sectors
of the economy and is growing at the rate of 15-20 per cent annum.
The origin of life insurance in India can be traced back
to 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
In the broadest sense, a fraud is an intentional
deception made for personal gain or to damage another individual; the related adjective is fraudulent.
The specific legal definition varies by legal
jurisdiction.
INSURANCE FRAUD HAS BECOME A LUCRATIVE
BUSINESS FOR CRIMINALS WHO FIND IT VERY EASY TO “PLANT” EVIDENCE AND DEMAND INSURANCE COVER FOR ANY DAMAGES OR LOSS THAT IS INTERNATIONALLY CARRIED OUT.
INSURANCE FRAUDS ARE FOUND IN AREAS LIKE
HEALTHCARE, AUTOMOBILE, LIFE, FIRE INSURANCE.
Insurance fraud is any act committed with the intent
to fraudulently obtain payment from an insurer.
Insurance fraud has existed ever since the beginning of
insurance as a commercial enterprise.
Fraudulent billings
represented nearly 30% of the insurance industry cases. These cases were nearly twice as common as the next-most-frequently reported scheme, which was check tampering. the organizations in the insurance industry conducted fraud training for their employees and managers — a higher rate than for any other industry prosecuted.
Conversely, nearly 70% of
Of the 78 cases, 74% were
The “chief motive in all insurance crimes is financial
profit.”
Insurance contracts provide both the insured and the
insurer with opportunities for exploitation.
This condition can be very difficult to avoid, especially
since an insurance provider might sometimes encourage it in order to obtain greater profits.
INTERNAL FRAUD
EXTERNAL FRAUD
INTERNAL FRAUD OFTEN INCLUDES THE
CREATION OF A FICTIOUS COMPANY TO GENERATE INSURANCE PREMIUMS AND ISSUE FRAUDULENT POLICIES .
THIS IS USUALLY PERFORMED BY PROFESSIONAL
CON-ARTISTS, BUT THERE ARE SOME RED FLAG TO PROTECT CONSUMERS FROM BEING THE VICTIM OF LIFE INSURANCE FRAUD.
FOR INSURANCE COMPANIES THERE ARE SETS OF
INDICATORS THAT AROUSE SUSPICION THAT A CONSUMER OR BENEFICIARY IS TRYING TO DECEIVE THE COMPANY. IF FRAUD IS PROVEN THE CLAIM WILL BE DENIED AND THE CRIME WILL BE REPORTED TO THE AUTHORITIES. FOR EXAMPLE IN CALIFORNIA INSURANCE FRAUD IS PUNISHABLE BY UP TO FIVE YEARS IMPRISON AND A $50,000 FINE.
HEALTH CARE INSURANCE
AUTOMOBILE INSURANCE
PROPERTY INSURANCE
ACCORDING TO ROGER FELDMAN, BLUE CROSS
PROFESSOR OF HEALTH INSURANCE AT THE UNIVERSITY OF MINNESOTA, ONE OF THE MAIN REASONS THAT MEDICAL FRAUD IS SUCH A PREVALENT PRACTICE IS THAT NEARLY ALL OF THE PARTIES INVOLVED FIND IT FAVOURABLE IN SOME WAY.
THE INSURANCE RESEARCH COUNCIL
ESTIMATED THAT IN 1996. 21 TO 36 PERCENT OF AUTO-INSURANCE CLAIMS CONTAINED ELEMENTS OF SUSPECTED FRAUD.
THERE IS A WIDE VARIETY OF SCHEMES USED TO
DEFRAUD AUTOMOBILE INSURANCE PROVIDERS.
THESE PLAYS CAN DIFFER GREATLY IN
COMPLEXITY AND SEVERITY.
FRAUDULENT ACTIVITIES AGAINST PROPERTY
INSURANCE PROVIDERS CONSIST OF THE DESTRUCTION OF PROPERTY IN ORDER TO RECEIVE INSURANCE PAYEMENTS FOR IT.
PROPERTY INSURANCE FRAUD CAN ALSO OCCUR
WHEN CLAIMANTS EXAGGERATE THE VALUE OF THE PROPERTY LOST OR DAMAGED.
OLDER CITIZENS
POLITE AND TRUSTING NOT REPORTING A FRAUD
FRAUD-BUSTING UNITS
EDUCATE CONSUMERS TRAIN EMPLOYEES
TRACK DOWN CHEATERS
AVOID SIGNING BLANK INSURANCE CLAIM
FORMS. INSURER’S BENEFITS STATEMENT CAREFULLY ASK YOUR HEALTH CARE PROVIDER WHAT THEY CHARGE FOR A VISIT, TREATMENT. WHAT YOU WILL NEED TO PAY OUT OF YOUR POCKET. NOTE OF ALL OF YOUR HEALTH CARE AND MEDICAL APPOINTMENTS.
An insurer obtained a new corporate client. The brokerage deliberately understated the risk on the policies and as a result the insurer grossly under priced the policies. The risk the broker exposed the insurer to exceeded £100k. It was later discovered that the broker had done this with 20 large corporate clients placing the policies with numerous insurers. Investigators were alerted and investigations revealed that the incentive behind the under stating of these large corporate policies was to build a portfolio of seemingly valuable business. They then sold that business to an unsuspecting reputable broker firm. Investigations identified that the entire portfolio of business was fraudulent. False signatures were also identified on a number of policies.
The fraud created victims of 20 corporate health insurance policy holders, numerous insurers and the unsuspecting broker.
Civil legal action is pending and the matter is currently being investigated by police.