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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