Fraud is not something to joke about

Preventing fraud is a central task at InSur S.A. Insurance Company. Producers, brokers, employees, policyholders, and insured parties are a fundamental part of that equation.

InSur S.A. Insurance Company has implemented a series of policies and procedures to prevent fraud. Good practices, fair treatment, and good faith must be rooted in all our actions as insurers, policyholders, and other participants in the insurance market.

Insurance fraud refers to any action or omission intended to illegitimately obtain a benefit by policyholders, insured parties, third parties, insurance agents, as well as other professionals involved in the contracting, issuance, and/or accounting of an insurance policy, or in the production, communication, intervention, and/or settlement and collection of a claim.

Fraud is a deceptive act or omission where the fraudster seeks to gain an advantage for themselves or a third party. Most jurisdictions have laws against insurance fraud, and in many, it is considered a crime.

Insurance fraud has direct consequences for society as a whole and does not only harm the insurer, as it affects the entire system. This is why it is crucial to raise awareness among all participants in the system.

Suggestions for Producers and Brokers in adopting anti-fraud measures at three key moments of their interaction with the client.

Verify the identity of the Policyholder / Insured / Beneficiary / Policypayer to be subscribed, in a reliable manner.

Obtain complete personal data: phone numbers, reference emails, occupation and/or profession, and document them.

Determine if the individual was insured previously and the status of their policies.

Request the necessary information to comply with Law 19,574 on the Prevention of Money Laundering and Terrorism Financing.

Request the information required by the insurer for proper underwriting of the insurance.

Pay special attention to increases in the sum insured, in relation to the insured’s income.

Request the reasons for the endorsement, considering that it may indicate a potential attempt to report a future claim.

  • Reasons for choosing the insurer.
  • Insurance and claims history.
  • Commercial, credit, and tax situation.
  • Motivation for purchasing coverage – insurable interest.
  • Reluctance to provide requested information.
  • Request for retroactive coverage.
  • Request for unreasonable coverage and/or insured sums in relation to the insurable interest to be covered.
  • How much time has passed from the occurrence of the loss to the communication?
  • Does the client request additional documentation, if applicable, before Insur asks for it?
  • If there is any circumstance that stands out regarding the claim/client’s behavior, do you inform the insurer?
  • Do you analyze if the description of the circumstances of the claim is confusing and/or contradictory?
  • Do you verify if there is reluctance to provide the requested information?

They should always consult with their insurer in case of any doubts or eventualities and communicate any updates that arise.

A good anti-fraud policy, known and endorsed by all market players, helps society as a whole and creates a strong insurance culture.

Beyond specific cases where a fraudulent attempt is made to gain benefit by an individual or a criminal group, there is one aspect that clearly exposes the fact that undetected fraudulent actions are paid for, such as in claims, and have a direct impact on the insurers’ costs. An insurance company, like any other business, must be profitable and efficient; in other words, it cannot bear losses without taking corrective measures, and one of these measures is that the rate it charges for the service it provides, i.e., the insurance premium, will be higher.

An effective and proactive fraud prevention management policy thus becomes a powerful tool to improve the insurer’s competitiveness and a responsible act benefiting all parties, creating a strong and responsible insurance culture.

The professional and efficient actions of advisors and brokers in collaborating with this effort help all market participants and result in a relative improvement in prices.

Deterrence and prevention actions must be communicated to all policyholders and insured parties, who should be alerted, for example, to:

They should never sign blank claims or loss report forms.

  1. They should never accept money, sign documents, or agree to power of attorney without fully understanding their scope and effects, nor acknowledge events that have not occurred, or accept legal assistance provided by unknown third parties.
  2. They should not alter the state of the items damaged by the loss (except for the obligation of salvage, meaning they must prevent or minimize further damage as much as possible), nor fraudulently exaggerate the damages; use false evidence; or provide false supplementary information.
  3. Fraud directed against the insurer causes harm to the entire community, affects premium costs, and occurs when people deceive the company (and/or the insurance advisor) to claim money or gain an advantage to which they are not entitled.
  4. Fraud against the insurer is a crime. Alteration, simulation, or distortion of personal, temporal, objective, causal, or location circumstances, as well as deliberate provocation or full or partial simulation of the occurrence of the loss, are some of the most common types of fraud, which leads people to accept it as natural without understanding the seriousness of the consequences.
  5. False statements or any withholding of circumstances known to the insured, even if made in good faith, which, if taken into account, would have prevented the contract or modified its conditions, render the contract void, with more severe consequences in cases of fraudulent or bad faith behavior.
  6. Remember that you may be involuntarily or voluntarily implicated in a fraud scheme. There is always the risk that someone with very bad intentions may encourage you to engage in practices that are illegal.
  7. You should never cooperate in the execution of a fraudulent scheme.
  8. You should never provide data or allow third parties access to your policies when it is not justified, nor allow the substitution or simulation of the real personal, temporal, objective, or causal circumstances related to the occurrence of a loss.
  9. You must make an effort to obtain real data and document, to the extent possible, the circumstances of the loss.
  10. Always consult with your insurer in case of any doubt or eventuality, and communicate any updates that arise.
  11. Remember that you must file a report for the occurrence of the loss. Try to formalize this report and ensure that you are informed of the claim number for internal processing within the company.
  12. Be aware that your coverage may have limitations regarding items, risks, or concepts not covered.
  13. You should be cautious of coverage offers, typically below the average market cost, from unauthorized marketers.
  14. While it is allowed to insure the same interest and risk with more than one insurer, all entities must be notified beforehand. It is not permissible for the compensation to exceed the amount of the damage suffered, nor to pursue claims for a loss that has already been compensated by another insurer.

Let’s all fight against fraud

InSur S.A. Insurance Company is committed to this, and has a dedicated department for analysis and prevention. Insurance fraud harms us all, so let’s understand its implications, raise awareness, and fight together to prevent and eliminate it.

For any doubts or inquiries, please contact:

© Compañía de Seguros Insur S.A.

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