Pockets of Insurance Frauds in India

More articles

Mayur Joshi
Mayur Joshi
CA Mayur Joshi is award winning fraud examiner and foremost forensic accountant. He is regularly quoted in various news papers and is author of atleast 7 books on Forensic Accounting, Money Laundering and Compliance.

Almost every month, fraudsters have been popping up in small towns across the country to carry out organized attacks on life companies. They come in all hues: faceless crooks in Punjab buying life covers with a bogus log-in on the Internet, as well as old-world racketeers armed with fake death certificates. Fighting the Insurance Fraud in India is a herculean task.

What is Insurance Fraud?

Insurance fraud happens when someone deceives an insurance company to get money or benefits they are not entitled to. This can involve false information, exaggerating claims, or even staging events to appear as accidents or damages.

In the complex business of life insurance, the deal with the customer is simple: the family gets the cheque when the policyholder crosses over to the other side; indeed, to most, few things in life can be more black and white. But there can be 50 shades of grey when death is less than honest — a truth that many private insurers are discovering every other day.

Insurance Frauds in India

According to the Indiaforensic Research, Insurance companies lose more than $ 6.25 billion to frauds. According to this research, fraud is divided into two types

  1. Frauds committed by Insurance companies and
  2. Frauds committed against the Insurance companies.

Insurers are stumbling on strange cases where the police, panchayat sachiv, lawyers, and family members are hand in glove. They push claims where the policyholder is still alive. In some cases person is made to sign a policy on the deathbed.

Insurance companies are also seeing cases where a policyholder is simply a fictitious character. While for ages insurance crimes have been fodder for movies and thriller stories, what has surprised insurance companies this time around is the organized nature of the frauds and their rising number. Cases of fraud have risen to 2-4 percent of total rejected claims from well below 1 percent a few years ago.

The hotbeds for fraudsters are Sabarkantha, Modasa, Kheda, and Mehsana in Gujarat; Jalgaon, Dhule, and Nandurbar in Maharashtra; Ganjam in Odisha, and Morena in Madhya Pradesh.

Also under watch are places like Khammam (Andhra Pradesh), Kubernagar, Sunder Nagar, and Bhavnagar (in Gujarat), and parts of Punjab where, though instances of fraud have been reported, the situation is not yet alarming.

The unofficial decision among life insurers is to stay away from selling policies in these regions. Particularly on the Net and covers with a high sum assured. The insurers will soon present a note on the situation for the Life Insurance Council to take up the matter with the Insurance Regulatory & Development Authority.

Tackling Insurance Frauds in India

To fight insurance fraud effectively, we need experts. Certified Insurance Forensic Accountants are professionals who have the skills to uncover financial deception in insurance cases. In India, Indiaforensic provides special training programs to teach people about this important field.

Key Roles of a Certified Insurance Forensic Accountant

  1. Investigation Skills: They are trained to dig deep into insurance claims, using their investigative skills to spot irregularities or fraud attempts.
  2. Financial Analysis: They analyze financial records, transactions, and statements to detect discrepancies and ensure all claims are genuine and accurate.
  3. Evidence Gathering: These experts collect and organize evidence crucial for identifying potential insurance fraud cases, and supporting fair claim settlements.

Why Choose a Certified Insurance Forensic Accountant?

Having experts like these ensures insurance companies can separate legitimate claims from fraudulent ones. It protects honest policyholders, maintains a fair insurance system, and ultimately keeps insurance premiums in check.

- Featured Certification-spot_img