Page 25 - Insurance Times July 2021

Example- Exaggerating damages/loss, Fraudulent Death Major Frauds at Policy Servicing Stage are:
Claims, Medical Claims Fraud 1) Falsifying and / or Damaging / Destroying

X Intermediary Fraud - Fraud perpetuated by an Documentation
insurance agent / corporate agent / intermediary / 2) Signature Forgery
Third Party Administrators (TPAs) against the insurer 3) Misrepresentation of Customer Profile
and/or policyholders.
4) Dishonoring of Renewal Premium Cheque
Example - Adverse selection of clients for insurance
cover, Inflating the premium, passing on the correct Major Frauds at Claims/ Surrender Stage are:
amount to the insurer and keeping the difference
1) Fraudulent Death Claims
X Internal Fraud - Fraud / misappropriation against the
2) Fake Medical Documents at the time of Claims
insurer by its Director, Management and / or any other
office or employee (by whatever name called) 3) Bogus Claim
Examples - Misappropriating the funds, fraudulent 4) Document Tampering/Misleading Documentation
financial reporting, forging signatures 5) Misrepresentation of Customer Profiling.

6) Signature Forgery
These types of Frauds occur at different stages of Proposal's
Life Cycle. Life Cycle of proposal to policy can be depicted
as per below figure: Examples of actual Frauds from the
insurance industry at these different

stages of Life Cycle:
At Proposal Stage:
1) Collection of cash from customer & using it for issuance
of new policy.
2) Forgery or alteration of proposal form/cheque /bank
draft/financial instrument/account belonging to the
company or any document submitted by the customer.
3) Non-disclosure of the information provided by the
customer. (Eg- Medical details /Income details etc.)
Fig. 4 - Life Cycle of Proposal Form 4) Providing fake KYC/confidential report of sales
representative/ moral hazard.
Major Frauds at Proposal Stage are: 5) Changing customer DOB/ Age proof etc. so that the
1) Misappropriating Fund customer can fit in a particular product.
2) Document Tampering/Misleading Documentation 6) Report with wrong declaration or improper verification/

3) Misrepresentation of Customer Profiling Issuing fake receipt/fake policy.
4) Non-Disclosure of Material Facts 7) Falsifying and/or damaging/destroying documentation/
OSV done for forged documents.
5) Bogus Business
8) Sourcing business to a nonexistent customer.
Major Frauds at New Business Stage are: 9) Sourcing business without customer's knowledge.
1) Medical impersonation/Rebating business
10) Providing customer incorrect Mobile No./ Mail id for
2) Document Tampering/Misleading Documentation clearance of PIWC call.
3) Incorrect Information during Pre Issuance Welcome Call
(PIWC) At New Business stage:
1) Intermediary in coordination issuing fake medical
4) Non-Disclosure of Material Facts/ Medical Condition /
Health/ Confidential information documents of customer.

The Insurance Times, July 2021 25