Presentation on Insurance Fraud

Frauds in Insurance SectorA Presentation byGROUP - IIPune January 2014 Batch of Certificate Course onForensic Accounting and Fraud Detection1IntroductionFraud in Insurance may take place in various stages like:Fake Insurance PoliciesFake CustomersFake DeclarationsFake ClaimsFake Claimants2Classification of FraudsInsurance Frauds are broadly classified as: Hard Frauds: (Fake Auto Theft, Fake Fire thefts, or collusion frauds etc. Here the claim itself is questionable).Soft Frauds: (Opportunist frauds here claim amount is exaggerated on an otherwise legitimate claim).3Frauds in Life InsuranceIssueFake customersMisrepresentation of Facts: Age, HealthClaimsFaking death claimsFake claimants

4Frauds in Medical InsuranceIssueMisrepresentation of Facts: Age, HealthClaimsFake injuries / illnessExaggerated injuries / illnessInflated medical / hospitalization bills5Frauds in Personal Accident InsuranceFake CustomerFake Accident / Disability / DeathFake Claimant6Frauds in Motor InsuranceIssueFake / forged DocumentsMisrepresentation of FactsClaimsFake accidents / repair billsInflated repair billsTampered repair billsFake third-party claimant7Frauds in Marine InsuranceFake shipmentMisrepresentation of value, quantity, qualityFake in-transit theft8Frauds in Fire & Burglary InsuranceFake stock / assetMisrepresentation of value, quantity, qualityFake fire / burglary claims9Frauds in Asset / Machinery InsuranceFake assetsMisrepresentation of value, quantity, qualityFake breakdown / damage claims10Red FlagsAbnormal delay in submitting claim / documentAbsence / discrepancy in key documentary evidenceAbnormal urgency to settle claimAbnormally large claim vs. usual businessConvenient AlibiRecent policy / increase in Sum Assured11Situations involving Insurance FraudMr. 420, a teacher, takes a Personal Accident policy of Rs. 42 Lacs on his 42nd birthday

M/s. Toliyawalla & Safediwallas export consignment was rejected by their Bangkok customer

F Company takes a Group Medical / Health Insurance policy on its 1200 employees

12Presented By Group II MembersRoll No.NameMember No.CA Kulkarni Prakash PurushottamCA Gupta Satya PrakashCA Parakh Vinod KumarCA Doshi Sunny RajendraCA Newaskar Ranjit Raghunath13Thank YouDistrust the obvious and apply professional skepticism