Insurance Frauds: Concepts and Cases

Although frauds and scams in the financial sector are generally on the rise, insurance frauds pose a hazard that is essentially very different. When the perpetrator gets away with the crime, it constitutes not just a breach of ‘utmost good faith’; there is also a drop in the insurer’s ability to meet genuine claims, although the commitment remains. This calls for large-scale capital infusion at a time when the industry is already reeling from massive claims from every sector. Insurers are also under constraints to pass the costs of frauds losses to customers in the form of higher premiums –for lower risk cover. Apart from the threat of frauds through frivolous and escalated claims, by imposters through false claims, etc., there is the other danger of fraud committed by insurance company personnel. To cap it all, most people surveyed had a very casual approach towards such frauds, as a result of which there is no public outcry when such frauds take place, unlike what happens in the case of banking scams. Another factor that is responsible for the proliferating frauds in insurance today is the number of products that lend themselves easily to such acts of malfeasance, not to speak of the wide variance in the regulatory approach in different countries that provide routes for easy escape and non detection. The book deals with all these features as well as various other aspects such as the global scenario in insurance frauds, why insurance frauds succeed, the menace of money laundering, detection of frauds, and the growing menace of funding terrorism through the conduit of insurance frauds, as well as other aspects of this theme. There are also cases on auto, health, catastrophe and life insurance frauds, which are the most common types of fraud, as well as a series of articles that highlight cases and caselets pertaining to insurance fraud. It gives an in depth and comprehensive view about what is happening in the sphere of such frauds and what to do about it. This book, which focuses on a very pressing issue that has rarely been written about, would be targeted at insurance regulators and insurance companies, CBI personnel, faculty and students of insurance and the reading public, in general.