Page 5 - Risk Management Bulletin Jan- Mar 2021
P. 5
RMAI BULLETIN JANUARY TO MARCH 2021
FRAUD RISK
MANAGEMENT
THROUGH
CONTROL
MEASURES:
COST V/S
UTILITY
Abstract:
Paper starts with definition of Fraud, the paper then explains what causes an individual to do Fraud. This
was then explained in detail with the help of a case study. Author then attempted to give different
classifications of frauds and then types of Insurance frauds. Author then attempted to describe frauds at
different steps of a life cycle of a proposal form in an insurance company (example taken is from a life
insurance perspective). The Author tried to give actual examples of Frauds in entire life cycle of a proposal
form in a life insurance scenario. Author explained for a life insurance proposal form. Same is also applicable
for Non-Life & Health insurance too (though the terms will be different, but the way of Frauds are almost
similar). Further, Author Gives details on major Fraud Regulations in India. Author then highlighted different
fraud control measures which can be taken by an insurer during entire life cycle of the proposal form. Cost
aspects on Fraud Control measures at different stages of life cycle of the proposal form was also touched
upon by the author. Author then explained in detail the Fraud control measures through Fraud Awareness
sessions, Fraud Prevention mechanism, Fraud Detection mechanism and Fraud Response mechanism. Paper
ends with conclusion drawn by the author through his entire study.
Definition of Fraud - theft, corruption, conspiracy, embezzlement, money
laundering, bribery and extortion. Fraud essentially
The term 'fraud' generally includes actions such as
involves using cheating to deceitfully make a personal
gain for oneself and/or create a loss for another.
About the author Although definitions may vary but most are based
around these general themes.
Shibyanshu Sharma
CRMP, CRISC, ARM, FIII, ALMI, ACS, Why do people commit frauds?
ARA, SBI Life Insurance Co. Ltd.
There is no particular purpose behind fraud and any
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