Insurance fraud on rise, causing losses
Insurance fraud on rise, causing losses
Insurance fraud is on rise in Viet Nam and is becoming increasingly sophisticated, causing a huge loss to insurers and their honest clients, according to Trinh Dinh Hoan, director of the Finance Ministry's Insurance Management and Supervision Department.
Insurance fraud occurs when any act is committed with the intent to fraudulently obtain some benefit or advantage to which the perpetrator is not otherwise entitled, or someone denies a benefit to which someone is entitled.
According to the department, between 2007 and 2011 over 44,700 cases of insurance fraud were reported in Viet Nam, with around 40,700 cases involving life insurance.
The frauds cheated people and companies out of VND410 billion (US$19.7 million).
Hoan said that vehicle insurance fraud was also widespread, with an unusually high number of claims being made. A shortage of time to settle these cases means insurers often do not have time to verify these claims.
The Director General of AAA Assurance Corporation, Do Thi Kim Lien, told Hai Quan newspaper that from the middle of 2011 to the middle of last year, the company uncovered over 30 fraudsters attempting to claim sums worth as much as VND5 billion ($240,000).
She said that insurance criminals use various tricks to cheat their way to the money, for example by making insurance agents write incorrect information about the date they bought insurance for their vehicles.
Another common scenario is uninsured drivers causing road accidents and swapping the number plate of the damaged vehicle with one from an identical bike and buying an insurance certificate for the second plate number. In such case, the insurance sellers would be deceived if they did not check the vehicle's technical information including its engine code.
Meanwhile, the Legal Affairs Director of Life Insurance Prudential, Nguyen Thi Lan Anh, said that it was also common for people to falsify health records in order to be eligible for health insurance claims.
Lien said that stricter punishment should be imposed on insurance violators as under current regulations those who are found guilty of committing fraudulent acts are fined the set VND70 million ($3,400) only if they managed to receive the money.
"The regulation should be changed so that those who committed fraudulent acts are fined regardless if they managed to get the payment or not," she said.
Insurance companies also urged the co-operation of healthcare sector and the police in detecting and cracking down violators.
The companies themselves also needed to share information about agents or clients allegedly involving in making frauds, which would help to reduce risk, Lan Anh said.
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