Last year alone, payments from insurance companies to fraudsters amounted to over 50 billion rubles. This amount is 10% of all insurance payments for 2016.
A favorite area of insurance scammers is auto insurance. The share of car insurance payments is one fifth of the total amount. This also includes controversial situations when the insured person tries to unlawfully increase the amount of compensation, but there is no direct evidence. The share of payments to fraudsters for life, health and property insurance of citizens is a tenth of the total amount. But it is possible to prove insurance fraud in court only in 1% of cases. The insurers managed to return only five billion rubles out of the fifty they paid.
Insurance companies are confident that the number of fraudsters will increase. This is explained by a decrease in the standard of living of the population. An analysis of insurance fraud over the past years shows that during a crisis the number of financial frauds increases. A record number of fraud cases occurred in 1998 and 2008.
The increase in the number of insurance frauds forces insurers to include the expected damage from fraud in the client's tariff.
Causes of Insurance Fraud
The current situation, when insurance companies are forced to pay in dubious situations, and it turns out to be incredibly difficult to prove fraud in court, has its reasons:
Involvement of law enforcement officials in insurance fraud. In most cases, such fraud involves forgery of documents.
The loyal attitude of most people towards receiving undue benefits. Some citizens simply do not trust insurance companies, while others do not see anything reprehensible in such deception.
The Russian Union of Auto Insurers (RUA) conducted a survey, which revealed that 30% of citizens believe that all insurance companies deceive clients, therefore they do not consider it a crime to inflate the amount of losses if possible.
Auto liability insurance companies are seeing a pattern of fraud in this area:
A fourth of the incidents occur when a compulsory motor liability insurance policy was issued after the occurrence of an insured event.
A third of frauds involve staging an insured event (accident).
About 15% of fraudsters deliberately falsify facts related to the insured event (for example, that the driver was drunk or took drugs).
Responsibility
Fraud in property insurance is punishable by law. The Criminal Code of the Russian Federation provides for liability under several articles. Depending on the harm and danger to society, those responsible for crimes and scams can be sentenced to various terms.
Different categories of participants have their own individual and collective responsibilities. Fines are provided for all types of crimes. There are also those in which payments can be 100 times more than the material damage caused.
Fraud by insurance company employees
More than half of all cases of insurance fraud in the Russian Federation are carried out with the help of employees of insurance organizations. Even criminal communities can form, the basis of which is an unscrupulous insurance employee who decides to take advantage of his position in order to obtain illegal profits.
Security departments of insurance companies record the following facts of fraud:
Execution of an insurance contract retroactively (after the occurrence of an insurance situation).
Deliberate exaggeration of actual damage to increase the amount of insurance payments. In this case, the insurance employee is entitled to a percentage of the compensation received.
Conspiracy between an insurance company employee, service station workers and the client. In this case, the cost of repair work and spare parts that require replacement is inflated. The difference between the actual costs and the insurance compensation paid is divided between the three interested parties.
Misrepresentation of the facts of the occurrence of an insured situation in order to obtain compensation.
Distribution of fake insurance policies or blank contract forms.
How to avoid becoming a victim
Unfortunately, insurance fraud is ubiquitous today. You may become a victim of criminals who stage an accident on the road in order to receive an insurance payment. In such situations, you should not meet the criminals halfway, but rather contact the traffic police and a car insurance lawyer, who can arrive at the scene of the incident.
In order to prevent violation of rights by the insurance company, it is necessary to carefully study the proposed insurance contract. You have the right to demand clarification from the insurance company employees, but a more appropriate method would be to contact a lawyer. You can request a copy of a standard insurance contract from the insurance company and go with it to a lawyer to analyze the text of the agreement. This way you will be able to avoid many problems in the future and work with an insurance company that does not deceive citizens.
Tags:
Customer fraud
Clients try to deceive their insurance company by:
Agreements with an expert assessing the damage incurred and its cause-and-effect relationship with the insured event. Typically, the expert is offered a financial reward for deliberately exaggerating the amount of damage, and, consequently, compensation under the insurance contract.
Fake insurance documents. For example, a fake MTPL policy allows a car owner to avoid fines from the traffic police when checking documents. It will not be possible to receive insurance compensation under such a policy, but it is quite possible to save significantly on third party liability insurance.
Insurance of life, health or car with different insurers in order to receive compensation for one incident several times.
Fake car theft. Proving insurance fraud in this case is extremely problematic.
Fake mortgage insurance
Are you planning to get a mortgage? Please note: the bank will ask you to insure the property, as well as the life and health of the borrower. This is a mandatory condition for issuing a preferential targeted loan. By law, you can take out insurance from any company. The main thing is not to enter into an agreement with scammers. The bank has the right to terminate a transaction with an unscrupulous client, but it will be extremely difficult to prove its non-involvement.
Buy a policy from a trusted, reliable institution. Have you chosen a new insurance company that is not yet known to anyone? Check on the website of the Central Bank of the Russian Federation whether it has a license to operate. All insurers must be included in the register of the Central Bank.
Fraud involving third parties
Frequently, insurance fraud is carried out by seemingly uninterested persons. Accomplices will be required for the following insurance scams:
Staging an accident or other insured incident. For such fraud you will need the assistance of police officers, doctors or firefighters. They will prepare false protocols, medical certificates, extracts from non-existent medical records, and expert assessments to obtain insurance compensation.
Concealment of circumstances related to the insured event. This type of fraud scheme may involve experts, police officers, doctors, ambulance workers, and false witnesses.
It should be noted that in real life, various insurance fraud schemes are interconnected. Having unraveled the insurance scam, you can find out that clients of the insurance company, its employees, representatives of law enforcement agencies, experts, and doctors took part in it for the purpose of profit. Such organized crime in the insurance industry makes it very difficult to detect fraud and is the reason for the increase in losses in the insurance business.
conclusions
Insurance fraud is prosecuted under the laws of the Russian Federation. It is found in almost every market sector. It should be remembered that:
- A fraudster can be any of the subjects of the insurance business, including the policy owner, the policyholder, the beneficiary and the insurer.
- Scammers are often helped by third parties who are interested in receiving a portion of the profits. They are most often employees of a company, law enforcement agencies (traffic police, for example), lawyers (appraisers).
- If you realize that you are communicating with scammers, it is not recommended to agree to illegal conditions and schemes, so as not to become a victim or accomplice to a crime.
- Responsibility for insurance fraud includes not only fines, but also a real sentence of up to 10 years in prison under Art. 159 of the Criminal Code of the Russian Federation.
Do you have any questions? You can contact our online lawyer. Don't forget to indicate in the comments if you have had any cases of insurance fraud. Like and share information with your friends.
We are sure you will be interested in reading our article about fraud in the MTPL market.
Examples of insurance fraud
There are some outrageous cases of fraud in the insurance industry. Five of the most sensational scams of recent years.
Kill for insurance
A group of swindlers from Volgograd tried to demand compensation in the amount of sixteen and a half million rubles from insurance companies. The client entered into life insurance contracts for two and a half million rubles with six insurers, which included Alliance, RESO-Garantiya.
Compensation payments under the insurance contract were due to his friends. Two months later, the body of a man was discovered in the city center near the river. The deceased's hands and feet were cut off and his face was disfigured. Friends of the insured confirmed that this was their friend, additionally telling the police that the deceased loved to swim in the river.
By contacting insurers, the friends were able to receive compensation under an insurance contract from several companies. Security departments from other insurance companies conducted an investigation into the incident, which involved law enforcement officers.
As a result of the investigation, a “deceased” client was found; he, of course, turned out to be not only alive, but also healthy. At the end of 2014, a trial was held which sentenced the insured to three years in prison, and his accomplices to two and a half years in prison.
The car that died twice
A car owner from Armavir, through an agent, entered into a CASCO insurance contract for a car with, and six months later filed a claim with the insurance company about the theft of the car. According to the client, his car was stolen from the parking lot of one of the Armavir restaurants. The amount of compensation under the car insurance contract was two million rubles.
The insurance security service conducted an investigation, during which it turned out that more than a year ago (before the insurance contract was concluded with) the “stolen” car was severely damaged and could not be repaired.
It was also established that the policyholder purchased the car body, keys and a set of documentation from the previous owner. After drawing up an insurance contract, the client sold the car body for scrap metal, receiving eight thousand rubles for it. After selling the body, the client contacted the insurance company with a report that the car was stolen. Law enforcement officers stopped the investigation into the theft case and opened a new criminal proceeding charging the client under articles providing for liability for insurance fraud and deliberately false notification of law enforcement officers about the offense committed.
Concealment of the disease
A woman living in Krasnodar decided to deceive the VSK insurance company and receive compensation in the amount of twenty million rubles under a life and health insurance contract. A resident of Krasnodar was diagnosed with a disorder of the musculoskeletal system. This disease is chronic and is a direct indication for registration of disability.
Instead of going to the VKK, the woman went to the bank, where, using falsified salary certificates, she received a loan in the amount of twenty million rubles. After receiving the loan, the woman signed a life and health insurance agreement with VSK, according to which disability of the first or second group is an insured event, for which compensation payments are due.
The client did not notify the insurance company about the diagnosis of the disease, which is the basis for receiving a disability group. After waiting four months, the insured submitted an application to the bureau of medical and social examination and received a disability certificate. With documents in hand, the client turned to the insurance company with a demand for payment of compensation under the insurance contract. The VSK security service was able to establish that the client’s diagnosis was established before receiving the loan and signing the insurance contract. During the trial, the woman was found guilty of attempted fraud and sentenced to three years of probation.
Fake home
And the residents of Volgograd invented a new method of fraud. They signed a home insurance contract with VSK for the amount of sixty-eight million rubles. But instead of real houses, they insured dummies. The dummies were presented as residential buildings under construction, the total area of which was two thousand square meters. The non-existent houses were located in rural areas.
As evidence of construction costs, the scammers provided the insurance company with a package of false documentation, including invoices, contracts for construction work and other financial documents.
A few months after the insurance contract was issued, non-existent houses burned down, and fraudsters applied for insurance compensation. This fact aroused suspicion, and VSK security officers began an investigation. They found out that the elite new building was actually a fake. It was not mansions that burned down, but outbuildings without a foundation, roof, windows or communications. When concluding an insurance contract, clients deliberately deceived the VSK employee who executed it. The overestimation of the real value of the insured property was necessary to increase compensation for damage to it in the event of an insured incident.
The disclosure of insurance fraud became a justified reason for the insurance company's refusal to pay compensation to the scammers. However, the scammers did not want to resolve the matter peacefully. They filed a lawsuit demanding compensation from the insurance company in the amount of sixty-eight million rubles.
Representatives of the insurance company managed to prove their case in court. The police opened a criminal case for fraud on an especially large scale. Another, criminal, court handed down a suspended sentence with a probationary period of two years.
Insured against not leaving
An employee of a travel company received compensation from the insurance company in the amount of seven million rubles, having falsified an insurance event. The woman took out a non-travel insurance contract. It provides for a compensation payment in the amount of costs incurred to purchase the trip if it is impossible to travel for reasons beyond the client’s control. The developed fraud scheme turned out to be simple: using her official position, the woman drew up insurance contracts for clients whose information was in the travel agency’s database. Most people had no idea that they had become involved in insurance fraud.
The tour operator developed an entire fraud scheme: it falsified consulate refusals to issue visas and financial documents on payment for travel packages. Over the course of several years, the swindler managed to obtain insurance compensation on behalf of one hundred and fifty unsuspecting clients. And her income from fraud amounted to seven million rubles. After the opening of criminal proceedings and the presentation of charges, the former travel agent is under recognizance not to leave. There is no court decision on the case yet. And the fraudster faces up to ten years in prison.
Even more real cases of fraud involving employees! Read.
Legal basis
Insurance activities in Russia are regulated by the law “On the organization of insurance business in the Russian Federation” dated November 27, 1992 No. 4015-1. Persons who intentionally violate the provisions of a legislative act are liable under Art. 159 of the Criminal Code of the Russian Federation, which provides not only fines, but also imprisonment for up to 10 years.
Certain types of insurance services are regulated by specific legislative acts, including the following laws:
- “On compulsory civil liability insurance of vehicle owners” dated April 25, 2002 No. 40-FZ - OSAGO policies.
- “On compulsory health insurance” dated November 29, 2010 No. 326-FZ - compulsory medical insurance.
- “On mortgage (real estate pledge)” dated July 16, 1998 No. 102-FZ
Attempts to break the law promise trouble for scammers, from a fine to imprisonment.
THIS IS INTERESTING! In addition to the Criminal Code of the Russian Federation, the Code of Administrative Offenses specifies other types of liability for violations of the law. In Art. 12.37 of the Code of Administrative Offenses of the Russian Federation specifies the types of fines for driving a vehicle without compulsory motor liability insurance. Lack of insurance for new vehicle owners is not 100% a type of fraud. However, some clients use fake policies to avoid a fine, and this is a criminal act that already falls not only under Art. 12.37 Code of Administrative Offences.
