Frauds in Insurance Final.ppt

7/24/2019 Frauds in Insurance Final.ppt

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FRAUDS IN INSURANCE


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INTRODUCTION TO FRAUDS IN INSURA

What Are Frauds?

In a broad strokes defnition, raud is a deliberatemisrepresentation which causes another person to suerdamages, usually monetary losses. ost people consider the act

o lying to be raud, but in a legal sense lying is only one small

element o actual raud


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DIVISION OF INSURANCE FRAUD

!he "i#ision o Insurance Fraud was originally ormed in $%&' toin#estigate only raudulent automobile tort claims. In the early years,in#estigators had arrest powers but could not carry frearms. !oday, thedi#ision in#estigates all types o insurance raud crimes.

In#estigators are assigned to work general raud cases, workers(compensation raud, medical and health)care raud, and agent andcompany raud. Areas o assignment may include*

+Insol#ency ) Fraud committed by insurance companies that ail fnancdue to internal raud by owners and corporate ocers.+-nauthoried /ntities ) raud, both criminal and ci#il, committedlyinsurance companies operating illegally in the state.+0ealth 1are Fraud ) ocuses on organied medical and healthcare sca+Workers2 1ompensation ) in#estigates employers or workers(compensation premium raud.


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PRECAUTION IS BETTER THAN CUR

Insurance raud is not typically a #iolent crime, 3ust a lucrati#e one. Asconsumers, there are se#eral common)sense steps you can take to helpreduce raud and minimie its impact.

4e an inormed consumer* ) 5enerally speaking, the greater the riskhigher the premium.

1omparison 6hop* )7remiums can #ary signifcantly rominsurer to

insurer so it pays to shop around 8now your Agent or 4roker* )1onsumers can oten be #ictimied by

unscrupulous agents or brokers and disco#er only ater they fle a cthat they are without co#erage or their home or their car.

Where(sthe7roo? *) :e#er pay or a premium in cash. 7ay by checa money order made out to the insurance company directly or to thagency;not to the indi#idual agent or broker. In addition, alwaysre


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Insurance raud is any deliberate deceptionperpetrated against, or by, an insurancecompany or agent or the purpose ounwarranted fnancial gain.

Insurance raud occurs during the process buying, using, selling and underwritinginsurance.


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$. !he chie moti#e in all insurance crimes is fnancia

. any times it is obser#ed that alse insuranceclaim.@. !his allow raudster to fle claims or damages thane#er occurred and so obtain payment with little orno initial cost.

. !o attract maBimum customers towards the insurethan competitors .

C. With intention o concealing true inormation W.>.!age, dieses, etc.


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$.0ard Fraud *) It includes someone stagingcar accident, in3ury, arson, loss, break. In someone writing alse bills to medicate to

illegally recei#e money rom their insurancompany.

. 6ot Fraud *) !his is more dicult to deteIt happens when a person paid theirinsurance claim by telling EWhite lies.


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It is di#ided in ollowing type o rauds

i. Automobile insurance raud there arenumerous type o automobile raud claimssuch as

aGFailing a alse thet eBportbGFilling a alse in3ury reportcGFilling a alse accident reportdGFilling a alse damage report


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ii. Hie insurance raud ollowing are ways throughwhich raudster commits raud in lie insurance.

aG !he most common kind making deliberate miss statements on application or insurance.

bG It is obser#ed that many times the inormationpro#ided by the policy holder is ake or incomplete

with the intention o hiding truth. eg. Age actorhereditary problems


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cG "octors will get in#ol#ed in HI1 raud by actinmedical eBaminer that certiy the health o peoapplying with person seeking health insurance t

deliberately alsiy inormation on medical eBam

dG Jertical rauds in this agents recruits people

with terminal illness to buy numerous policies. 4the ma3ority o unds o policy holder death willend up in the in#estor.


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iii. 0ealth insurance rauds *)raudulent beha#iour designed to solicit money

person or group is not entitled is called as healthinsurance by Kowing e.g. we can commit rauds

aG Falsifcation o inormation on orms.

bG Filling o alse claims treatment or patients

that ne#er occurred

cG Filling o prescription under patients namesand then sel then in the black market.


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i#. 7roperty insurance *)!his is a wider area o insurance rauds dierent lo

i.e. fre, marine, burglary, thet etc.

aG =btaining payment that is worth more than the #ao the property or to destroy a subse


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@. Internal rauds *)!here are those perpetrated against an insurance

companies or its policy holder by the agent managereBecuti#es or other insurance employees or eBample

i. Fake L alse documentsii. False statementsiii. 7ocketing premiums


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./Bternal rauds *)!here are direct against an insurance by indi#idualor entitles or di#erse an policy holder medicalpro#ides benefciary #endor etc. it may ollowed

aG "isaster raud

dG 1reating a raud claim thet report

cG edical raud

dG Falsiying a thet report


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:ow a days it is necessary to adopt Eproper raud

pre#ention programme to control the rising insuranrauds

5eneral measures

$G Awareness among the customer is #ery

important to gi#ing proper training programmerstreet play consumer arer

G >ole o 5o#ernment is #ery important sectors oinsurance to take strict actions against rauds


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@G edia can play important role in spreading oawareness and knowledge through newspaper,magaines, !J, radio

G !>A"A, 6/4I, should prepare action plan tocombat with the serious issue o rauds

CG 7olicies authorities, 14I should take acti#e leadin tracking down in the cheater

'G It is necessary to organie collect and e#aluatethe eecti#eness o inormation so that themanagement may a#oid rauds.


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6pecifc measure

$. It re


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!here need or a uniorm policy and standard which

will guide the action o employees within a insurancecompany section $ o I>"A act $%%% was lay downsthe power duties o I>"A

$. 6peciying code o conduct or sur#eyors and losassuror

. 7romoting eciency in the conduct o insurancebusiness

@. Haying ees and other charges or carrying out othe purpose o this act


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. Issue to the applicant o a certifcates resignations, renews, modiy withdraw suspend orcancel such registration

C. >egulating in#estment o und by insurancecompany

'. >egulating maintenance o margin o sol#ency

&. Ad3udication o disputes between insurer and

intermediaries or insurance intermediaries

M. 6uper#ising the unctioning o the !ari ad#isorycommittee


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$. As per the code, it would be necessary or those a#

insurance to fll in the applications themsel#es.

. It is also mandatory or the agents to disclose ondemand the commission that they would be entitled torom the proposal.

@. !he pro#ision inn the code to mainly a#oid complainat a later stage, rom the nominees o the insured

who at the time claim say that discrepancies couldha#e been a#oided i the insure had flled in theapplications on their own.

AN=> A1!IJI!I/6 F=> AWA>/:/6


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aG 7romotion o a better understanding o non)lie

insurance amongst the public.

bG 7romotion o sound de#elopment and maintenancethe reliability o the non)lie insurance industry.

cG 7resentation o the reesponse to social issues e.g. combating automobthet.


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eG 7romoting dialogue and inormation eBchangewith o#erseas insurance associations.

G !he 5I council undertakes acti#ities ha#ing orreaching social implications in association with

law enorcement agencies.

gG !he 5I council promotes consumersunderstanding o insurance and the presence ogeneral insurance industry in society.


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Frauds in Insurance Final.ppt

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