Page 34 - Life Insurance Today May 2016
P. 34
Life insurers form repository to
fight fraud
T he new rules in the life experienced increased fraud in certain insurers have tied up with Experian,
insurance industry have geographies like Uttar Pradesh, including ICICI Prudential Life
made it impossible for an Gujarat and Andhra Pradesh," said Insurance Co. Ltd, Kotak Mahindra Old
insurer to reject a claim Khushru Sidhwa, executive vice- Mutual Life Insurance Ltd, Birla Sun
after three years. For you, president, audit and risk Life Insurance Co. Ltd, and Reliance
this is good as your insurer can't deny management, HDFC Standard Life Life Insurance Co. Ltd.
your beneficiary insurance money if a Insurance Co. Ltd. In fact, according to
claim is made after three years of some estimates, insurers lose about More companies are joining. "We are
buying a policy. Within three years, 6% of revenue annually due to fraud. hoping to complete the process of
the insurer can investigate the claim tying up with the remaining insurers
and repudiate on grounds of fraud or To battle fraud, life insurance within the next couple of
misrepresentation. companies with the help of the Life months,"said Mohan Jayaraman,
Insurance Council, industry body country manager, Experian India.
The rules state that life insurance representing life insurers in India,
companies must compulsorily pay all have signed up with Experian India, How does it work?
claims made three years after the which provides business data and
date of commencement of a policy. analytical tools, to build a data Experian has been running a fraud
No exceptions. So, if there is fraud, repository to create a fraud repository for the banking sector for
mis-statement or non-disclosure by monitoring framework. over four years and has tie-ups with
the policyholder, the insurer has three 43 banks. It screens customer
years to discover and act on it. After "Experian was selected from three applications to pick out discrepancies
that, the policy cannot be called into applicants. A small group of three and possible fraud with the help of
question. insurers was then constituted to draft the Hunter system, a patented
the terms of agreement and finalise solution by Experian for fraud
This has worried insurers, especially in data fields. The agreement was then detection and management. At
an environment where fraud is on the rolled out by the Life Insurance present, it has a database of about 50
rise and policies are bought with an Council for life insurance companies million records. "It is designed to
intention to commit fraud. "In the last on a voluntary basis. Insurers are free ensure privacy of data.
couple of years, fraud by both to sign up with the repository. For
distributors and customers has gained now, we have a contract of three Hunter is operated by a body
volume, size and complexity. Policies years with Experian," said Sidhwa. regulated by the Reserve Bank of
are bought on fake names and on India. In case an application is
behalf of deceased persons; we have Currently, 15 out of a total of 24 potentially fraudulent, only its
relevant details are shared; individual
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34 May 2016 Life Insurance Today
