Page 21 - Insurance Times July 2021

3rd Prize Winner : Technical Paper Writing Contest 2020 Cover Story
FRAUD RISK

MANAGEMENT

THROUGH

CONTROL

MEASURES: COST

V/S UTILITY

Definition of Fraud - X perceived suitability of targets for fraud

The term 'fraud' generally includes actions such as theft, X technical ability of the fraudster
corruption, conspiracy, embezzlement, money laundering, X likely and real risk of discovery after the fraud has been
bribery and extortion. Fraud essentially involves using carried out
cheating to deceitfully make a personal gain for oneself
X expectations of consequences of discovery (including
and/or create a loss for another. Although definitions may non-penal consequences such as job loss and family
vary but most are based around these general themes.
stigma, proceeds of crime confiscation, and traditional
Why do people commit frauds? criminal sanctions)

There is no particular purpose behind fraud and any X actual consequences of discovery.
clarification of it needs to take account of various aspects.
There are different views on why do people commit Frauds.
Looking from the fraudster's perspective, it is necessary to As per researcher Tommie Singleton, PhD, University of
take account of: Alabama:
X motivation of potential offenders Some individuals are honest all of the period.
X circumstances under which individuals can justify their Some individuals are dishonest all of the period.
potential crimes away Most individuals are honest some of the period.
X opportunities to commit crime(s) Some individuals are honest most of the period.

About the author Note : With profound grief we inform our readers that
Mr. Shibyanshu Sharma succumbed to Covid-19 recently.
Shibyanshu Sharma Insurance Industry has lost a bright, young & dynamic
CRMP, CRISC, ARM, FIII, person. We pray to almighty to give courage to his family
ALMI, ACS, ARA, to bear this irreparable loss.
SBI Life Insurance Co. Ltd. - Editor

The Insurance Times, July 2021 21