Fraud affects the lives of innocent people as well as the insurance industry. Insurance fraud has existed ever since the beginning of insurance as a commercial enterprise. It takes many forms and may occur in any areas of insurance.
Hard Frauds and Soft Frauds
An insurance fraud could either be a hard fraud or a soft fraud.
A hard fraud occurs when someone deliberately plans or invents a loss such as a theft of a motor vehicle or setting fire to property covered by an insurance policy.
Soft frauds are more common and include exaggeration of legitimate claims by policyholders. They are also referred to as opportunistic frauds.
Insurance companies, their intermediaries or those pretending to be either of them may also perpetrate frauds. It is important that fraudulent activities are eliminated from the industry and it is the duty of all stakeholders to do their bit in dealing with insurance fraud.
The IRDAI has come across certain instances of fraudulent activities and has issued alerts to the public about them
Health Insurance business by unregistered entity
Public Notice – Let the buyer beware – Check veracity of entity before buying insurance.