FRAUDS IN INSURANCE34 Prajakta Patil35 Manisha Pawar36 Vaibhav Ranjankar

FRAUDSMeaningInsurance frauds is any act committed with the intent of fraudulently obtain payment from an insurer.Insurance crimes also range severity from the slightly exaggerating claims to deliberately causing accidents or damage.Fraudulent activities many times affect the lives of innocent people bath directly through accidental or purposeful injury or damage and indirectly as there crimes cause insurance premiums to be higher.

CAUSES OF INSURANCE FRAUDSThe chief motive in all insurance crimes is financial profit.Many times it is observed that false insurance claim.This allows fraudster to file claims for damages that never occurred and so obtain payment with little or no initial cost.To attract maximum customers towards the insurer than competitors.With intention of concealing true information W.R.T age, disease, etc.

TYPES OF INSURANCE FRAUDMany times insurance frauds exist from scamming whether it is auto insurance, life or propertyHard fraudSoft fraudInternal fraudExternal fraud

Hard Fraud :- It includes someone staging a car accident, injury, arson, loss, break. In or someone writing false bills to medicate to illegally receive money from their insurance company.Soft Fraud :- This is more difficult to detect. It happens when a person paid their insurance claims by telling white lies.

It is divided in following type of fraudsAutomobile insurance fraud there are numerous type of automobile fraud claims such asFailing a false theft exportFiling a false injury reportFiling a false accident reportFiling a false damage report

Life insurance fraud-following are ways through which fraudster commits fraud in life insurance.The most common kind making deliberate miss-statements on application for insurance.It is observed that many times the information provided by the policy holder is fake or incomplete with the intention of hiding truth .eg. age factor hereditary problems

Doctors will get involved in LIC fraud by acting as medical examiner that certify the health of people applying with person seeking health insurance they deliberately falsify information on medical exams.Vertical frauds in this agents recruits people with terminal illness to buy numerous policies. But the majority of funds of policy holder death will end up in the investor.

Health insurance frauds = Fraudulent behavior designed to solicit money which person or groups is not entitled is called as health insurance by following e.g. we can commit fraudsFalsification of information on forms.Filling of false claims treatments for ratients that never occurred Filling of prescriptions under patients names and then self then in the black market

Property insurance = This is a wider area of insurance frauds different losses i.e. fire ,marine , burglary , theft etc Obtaining payment that is worth more than the value of the property or to destroy an subsequently receive payment for goods that couldnt otherwise sold Payment of exorbitant commission to the agents for sales and advertisement of the policy by the insurance companies

Internal frauds = there are those perpetrated against an insurance companies or its policy holder by agent manager executives or other insurance employees for example Fake / false document False statements Pocketing premiums

External frauds = there are direct against an insurance by individuals or entitles or diverse an policy holder medical provides beneficiaries vendor etc it may followed Disaster fraud Creating a fraud claim theft report Medical fraudFalsifying a theft report

Measure to prevent insurance fraud

Now-days it is necessary to adopt proper fraud prevention programme to control the rising insurance frauds General measuresAwareness among the customer is very important to giving proper training programmer street play consumer farer

Role of government is very important sectors of insurance to take strict actions against fraudsMedia can play important role in spreading of awareness and knowledge through newspaper , magazines ,TV ,radio TRADA,SEBI, should prepare action plan to combat with the serious issue of fraudsPolicies authorities ,CBI should take active lead in tracking down in the cheater

Specific measurer It requires high standard of integrity from director management and employees of insurance organizationIt is necessary to set the realistic goals and objectives for the best use of resources.It is necessary to organize collect and evaluate the effectiveness of information so that the management may avoid frauds.

Measure by IRDA

There need for a uniform policy and standard which will guide the action of employees within a insurance company section 14 of IRDA act 1999 was lay downs the power duties of IRDASpecifying code of conduct for surveyors and loss assurorpromoting efficiency in the conduct of insurance business

Laying fees and other charges for carrying out of the purpose of this act Issue to the applicant a certificates of resignations ,renews, modify withdraw suspend or cancel such registration Regulating investment of fund by insurance companys

Regulating maintenance of margin of solvencyAdjudication of disputes between insurer and intermediaries or insurance intermediaries Supervising the functioning of the Tariff advisory committee

IRDA Is Code Of Conduct For AgentsAs per the code, it would be necessary for those availing insurance to fill in the applications themselves.It is also mandatory for the agents to disclose on demand the commission that they would be entitled to from the proposal.

The provision in the code to mainly avoid complaints at a later stage, from the nominees of the insured who at the time claim say that discrepancies could have been avoided if the insure had filled in the applications on their own.

Major Activities For Awareness Of FraudPromotion of a better understanding of non-life insurance amongst the public.Promotion of sound development and maintenance of the reliability of the non-life insurance industry.Presentation of request and proposal.

Response to social issues eg. Combating automobile theft.Promoting dialogue and information exchange with overseas insurance associations.The GI council undertakes activities having for reaching social implications in association with law enforcement agencies.The GI council promotes consumers understanding of insurance and the presence of general insurance industry in society.

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