CONTROLLING

INSURANCE FRAUD

What is Fraud?

Fraud is defined as an illegal act of deceit,

concealment or violation of Trust.

It is perpetrated by persons or organizations for

monetary gain, property gain or to avoid
payments or loss of services or to secure
personal or business advantage

3 Broad Categories of Fraud

1. Policy Holder & Claim Fraud against

insurer
2. Intermediary Fraud against insurer &/or

Policy Holder
3. Internal Fraud against insurer by

employee

Means to control Fraud

Identify

areas more prone to Fraud

Identify

Patterns or Transactions that look

unusual need further scrutiny

Create

a Framework for tracking & monitoring

processes,transactions & leakages

Awareness
Build

Training

Analytical Tools & Capabilities

Means to control Fraud

Stricter U/W & Claims Procedures

Proper documented systems (digitised)

Internal Checks and balances

Severe actions against fraudster (internal or

external)

Regular audit and inspections of both internal

and external parties

Means to control Fraud

Stricter legislations to deal with fraudsters to instill

a sense of fear among the perpetrators of the
crime

Due diligence before appointing intermediary

A sound whistle blower mechanism to provide

avenue for communicating fraudulent activities

Set up a sound Anti Money Laundering /Anti Fraud

Department

Strictly Follow KYC Norms

Sl.
No.

Nature of Fraud

Methods of Control

Prudent U/w (checking the

moral hazard). Forensic
Wilful Acts of the insured
investigations to find the cause
of loss.

Insuring a damaged
vehicle

Mandatory physical inspection

in case of break in insurance
technology like simulators to
reconstruct accidents and
figure out the reality of claims.

Misrepresentation/
misinformation/Suppress
Investigations by forensic
ion of material facts
specialists, medico-legal team
and investigators

Sl.
No.
4

Nature of Fraud
False Documents/
Inflated Bills

Money laundering
activities by
intermediaries

Methods of Control
Creating database. Regular and
surprise visits of Hospitals
Conduct thorough due diligence
at the time of appointment of
intermediaries.
Periodical training on the
repercussions of involving in
fraud

Sl.
No.
6

Nature of Fraud

Methods of Control

Inflating claims - collusion

Mandatory inspection of high
between surveyor &
value insurance/claims
insured
Maintaining database of
Collusion between
claims handled by advocates
Claimant Advocates with
and taking actions
Police in case of TP Claims
accordingly
Regular Audit of claim files
Collusion between
handled by TPAs. Depaneling
Patients/Hospitals/TPAs
of hospitals involved in
corrupt practices
Collusion between
Regular & strict audit of
employees and claimants operating offices.

THANK YOU