Insurance fraud cases on the rise -ICZ

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Harare (New Ziana)-Zimbabwe is experiencing an upsurge in insurance fraud cases, the majority of which are handled internally and fail to secure convictions, an official said on Wednesday.

Insurance Council of Zimbabwe (ICZ) chief executive officer Tendai Karonga said this at a function to sign a Memorandum of Understanding between the National Prosecuting Authority (NPA) and the Zimbabwe Insurance Bureau, a unit of the ICZ.

Karonga said the insurance industry continued to be negatively affected by fraudulent and criminal activities, which were accounting for 30 percent of claims incurred globally.

“These days in Zimbabwe, it may be higher,” he said, adding “Locally, very few insurance fraud cases come to the attention of the public as insurers traditionally handle such issues internally, unfortunately in many instances without successful convictions,” he said.

He said the MOU would go a long way in strengthening coordination in the fight against insurance fraud through appropriate support from the National Prosecuting Authority.

“The Crimes Bureau will greatly benefit from the guidance provided by the Prosecuting Authority in attaining successful convictions in the justice system where cases of insurance fraud and crime have been investigated and brought before the courts.

“The insurance industry shall work together with the National Prosecuting Authority and other law enforcement agencies to design, plan and implement an appropriate capacity building programme to enhance the ability to effectively handle insurance fraud and crimes,” he said.

Future collaboration between the two parties will include raising awareness on insurance, interventions necessary in the justice system, compilation of reports and statistics as well as evaluation processes.

Some of the insurance related crimes include organized criminals (syndicates) or corporates who steal large sums through fraudulent business claims, connivance among policyholders, staff employed by insurers, corrupt law enforcement officers/authorities and service providers.

Others include corporates facing business failure who commit arson on business premises to benefit from insurance business interruption and property damage payouts, as well as service providers who inflate service costs or charge for services not rendered.

Motor insurance fraud was also committed through misrepresentation of facts on insurance applications, inflating insurance claims, staging accidents, submitting claim forms for injuries or damages that never occurred and insuring cloned cars with the sole purpose of committing an insurance crime or fraud.

Speaking at the same occasion, NPA acting prosecutor general Nelson Mutsonziwa said the cooperation was expected to result in the curbing of insurance crimes.

“The increase in criminal activity is disturbing. It shows that we have a shortage of people who are honest,” he said.

“Today , we are seeing the consummation of a relationship which is principally meant to combat corruption. I want to assure you that the NPA will work with you to fight the scourge which is eroding resources of various institutions.

“Through this cooperation, which should run for two years, subject to renewal, I believe we are going to gain quite a lot,” he said.

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