Page 31 - Insurance Times July 2021

4) The Response: 5) Fraud Detection Mechanisms should be Robust.
Realistic steps for reacting to detected or suspected Indicators and Warnings should be properly analyzed
instances of fraud include: with the help of Fraud Detection Tools & Techniques.
Y Clear reporting mechanisms
6) Fraud Response System has to be clearly documented
Y A thorough investigation and timely acted upon.
Y Punishing of the persons responsible (internal, civil and/ 7) Insurers are responsible for Policyholders' Money, so any
or criminal) leakage in the system through frauds can question the
Y Recovery of stolen funds or property existence of an insurer.
Y Alteration of the anti-fraud strategy to avert similar 8) Regulators has clearly earmarked the guidelines to have
conduct in the future sound Fraud Control system in place. So, it's not the
choice to have fraud control system or not for an
5) The Investigation:
insurance company.
Preservation of evidence: It is vitally important that control
is taken of any physical evidence before the opportunity 9) Utility of Investing in Fraud Control measures far
arises for it to be removed or destroyed by the suspect(s). exceeds in benefits than Cost.
Physical evidence may therefore need to be seized at an
early stage in the investigation, before any witness 10) Cost is not the only investment for fraud control
statements are collected or interviews conducted. measures. The other investments are making sound
ethical culture for the organization, commitment &
Other Aspects- Physical & electronic evidence, interviews, time of top management, importance given to fraud
statements from witnesses, Statements from suspects.
awareness sessions, trainings etc.
Conclusion:
References:
With the detail study on all aspects of frauds, reason behind
frauds, causes of frauds, frauds at different stages of the 1) Fraud Monitoring Framework; www.irdai.gov.in
life cycle of a proposal, frauds controls at different levels with 2) IRDAI Corporate Governance; www.irdai.gov.in
or without cost interventions, fraud prevention, fraud 3) Guidelines on Corporate Governance for Central Public
detection and fraud response we can conclude below points: Sector Enterprises (CPSE's) issued by Department of
1) Reason behind a fraud need to be understood properly Public Enterprises (DPE); www.dpe.gov.in
before taking proper fraud mitigations. 4) Tommie W. Singleton's Research Works;
2) Cost is not a major factor in controlling frauds. www.researchgate.net
3) Developing a sound ethical culture plays a very vital role 5) "Fraud Triangle", by sociologist Donald Cressey;
for fraud prevention in an organization. www.acfe.com
4) Organization should work in having sound Internal 6) Fraud Examination 6th Edition by W. Steve Albrecht
Control systems to prevent Frauds. 7) Corporate Frauds; www.cimaglobal.com. T

IRDAI allows home treatment as add-on cover in health insurance
IRDAI has allowed non-life insurers to offer "homecare/domiciliary treatment" or treatment at home as an add on cover
afresh or to their existing policies. In a circular to all non-life insurers including standalone health insurers, the Insurance
Regulatory and Development Authority of India (IRDAI) has said companies have to file their products with it, if home
treatment is offered as an add-on cover.
According to IRDAI, homecare treatment is one taken at home for an ailment that normally needs hospitalisation
provided that a medical practitioner advises the insured home treatment; there is a continuous active line of treatment
with the health status of the insured monitored daily by a medical practitioner during the duration of home treatment;
and that records of daily monitoring of the insured patient and the treatment given are recorded and signed by a
medical practitioner Norms for settlement of claims should be mentioned in the policy document and prospectus, it said.
IRDAI said that insurers can offer the cover to their existing policyholders by charging an additional premium for the
residual period of time.

The Insurance Times, July 2021 31