Page 30 - Insurance Times November 2021

Public from all walks of life need to act as a watch dog on
the functioning of insurance companies, be it a government
undertaking or a private sector functionary, in order to
prevent misuse of our public money and funds raised for good
cause of nation building, in order to prevent loss to the
exchequer. Even involving our basic fundamental legal rights
through various acts constituted for awareness and
knowledge, need to be invoked for exposing such unsocial
elements existing in an organization or society.

Underwriting in Insurance
To begin with the underwriting of insurance, constituting
initial and basic aspect of any insurance operation starting
before its actual inception, the way of its business
causing financial loss to the organization and undue financial
procurement expenses, that is expected to incur before
gain to the insured are some of the common acts of
bringing a customer or a client in to its books of operation, corruption that the insurance industry is facing now a days.
seems to be the first baby of corruption in this sector. It
These intentional lapses committed in connivance with
serves a lawful way of legitimizing corruption for a corrupt
underwriters and business procuring agencies, committed
insurer, by not obliging the pre customer for petty gains but not only as acts of errors but intentional mistakes, are
also legitimizing its illegal financial gain out of this exercise.
deliberately done as a part of their corrupt ethos thereby
Thereafter, the prevailing official system further strengthens
encouraging corruption in Indian insurance industry.
the apprehension of legalized corruption by way of allowing
Prudent and safe underwriting has always been a key to the
payment of commission or brokerage to intermediaries for success of any insurance operations and that too corrupt free
bringing in such insurance income to its organization.
practices in its implementation finally generates much
Allowing these prevailing practices of financial benefits in
needed clean profits that is highly required for the survival
insurance sector, all happening under the nose of of the companies.
government of the day and its regulator, up brings the
chances of mal practices that breeds the corruption right
from its inception. Claims Management in Insurance
Claims management in insurance sector, which is also an
Further the loopholes and the safety security principles integral component of functioning of an insurance
supposed to be followed during the implementation of organisaton, is no longer an exception to such menace and
insurance proposals through its IT system process, typically to illegal corrupt practices, primarily due to involvement of
creates chances of manipulation, mainly for financial gains financial transactions and economic considerations. Such
of the insured, at the cost of financial loss of the insurer, financial frauds and economic crimes in existing system of
ultimately resulting in to unexpected corruption. Employee claims processing in insurance sector, enlarges apprehension
operators who are IT savy having knowledge of cyber of corruption, mainly due to involvement of various third
manipulations, are most likely prone to such unlawful mal party intermediaries during these financial settlements.
practices, mostly done at the behest of insured and also for
its selfish petty gains, thereby causing heavy direct and Insured at large, without understanding the logics behind
indirect loss to the exchequer and the insurer. timely finalization of their claim amount, tend to inflate it
and rely on to make profit out of such exercise, for which it
Then misuse of administrative powers by the competent is assumed to use insurance as mean of their financial gain.
authorities, by way of allowing irrational discounts in This unlawful tendency prevailing in our society, somehow
premium rates, disallowing ethical costs and not following generates willingness, sooner or latter, among our dealing
laid down prudent underwriting procedures, hiddenly in employees, to indulge in to such illegal practices. Unless
collaboration with insured, enhance the tendency of not timely and regularly sensitized, succumbing to such evil
corruption. All such acts of omission and commission for menace not only take little time but involve an easy process

30 The Insurance Times, November 2021