ANTI FRAUD REGULATION 18 12 2008
This section is currently available only in Arabic, please click here to read the Arabic version.Part 1: Introduction
Purpose
- This Code presents the general principles and minimum standards that should be met by insurance and reinsurance companies, including branches of foreign insurance and reinsurance companies, and insurance related service providers to prevent or at least minimize the occurrence of fraud.
- The objective of This Code is to promote high standards of fraud detection and prevention.
- This Code must be read in conjunction with the Law on Supervision of Cooperative Insurance Companies and its Implementing Regulations, in particular articles 2, 10, 12, 15, 19, 25, 28, 31, 43, 56, 71, 76 and 77.
Definitions
- The term “Companies” in This Code is intended to include: insurance and reinsurance companies, and insurance related service providers including insurance brokerages, insurance agencies, reinsurance brokerages, and reinsurance agencies. The rest of the terms used in This Code shall have the same meaning as per article one (1) of the Implementing Regulations.
Insurance fraud is defined1 as an act or omission of an act intended to gain dishonest or unlawful advantage for the party committing the fraud or for other parties. This may, for example, be achieved by means of:
a) Misappropriating assets. b) Deliberately misrepresenting, concealing, suppressing or not disclosing one or more material facts relevant to a financial decision, transaction or perception of the insurer's status. c) Abusing authority, a position of trust or a fiduciary relationship.
1 Source: IAIS guidance paper on preventing, detecting and remedying fraud in insurance, October 2006
Scope and Exemptions
- This Code applies to insurance and reinsurance companies, and insurance related service providers including insurance brokerages, insurance agencies, reinsurance brokerages, and reinsurance agencies.
Companies can be subjected to multiple forms of fraudulent activities from inside or outside the company. However, most of these activities fall under three overarching categories:
a) Internal fraud: fraud perpetrated by a company's employee. b) Intermediary fraud: fraud by insurance service providers against the companies or policyholders. c) Policyholder fraud: fraud committed in the purchase or execution of an insurance product to obtain an illegitimate coverage or payment.
Compliance Measures
- Companies must establish appropriate internal controls and procedures to monitor and ensure compliance with This Code, including the compliance of all contracted parties, in particular when there is clear evidence of a breach in the regulation.
- Companies must maintain adequate records to demonstrate compliance with This Code, including but not limited to, fraud detection, measure, mitigation and monitoring procedures.
Non-Compliance
- Non-compliance with the requirements set forth in This Code will be deemed a breach of the Law on Supervision of Cooperative Insurance Companies and its Implementing Regulations and the licensing conditions and may subject the company to enforcement action.
Structure of This Code
11. The Anti Fraud requirements are outlined in Parts 2 and 3 of This Code: a) Part 2 - General Requirements, which are principle-based b) Part 3 - Anti Fraud Standards, which stipulate the anti fraud requirements companies must adhere to in order to combat: i. Internal fraud. ii. Insurance service provider fraud. iii. Policyholder fraud. Part 2: General Requirements
Strategy
12. Companies should have a well defined fraud management strategy aligned with their overall vision, risk profile, business plan and objectives. 13. Companies fraud management strategies should include: a) A clear definition of the companies' level of fraud tolerance. b) A list detailing internal policies, procedures and controls intended to detect, measure, mitigate and monitor fraud. c) An outline of the renewal, validation and implementation processes of the fraud management strategy. 14. The fraud management strategy should be approved by the board of directors and updated on a yearly basis to ensure its alignment with companies' evolving business environment. Organizational Structure
15. Companies organizational structure should be designed to: a) Facilitate communication between staff, department heads and senior management. b) Provide a suitable environment for the execution and supervision of its fraud management strategy. 16. The company's board of directors is responsible for the management of fraud risk. Its activities should include: a) The approval of the fraud management strategy. b) The mobilization of required internal resources to enable proper detection, measurement, mitigation and monitoring of fraud risk in all market segments. c) The promotion of the company's anti fraud values and strategy across the organization and to the market. 17. If deemed necessary by its senior management or by SAMA, the company should consider establishing a fraud management department. This department will report all types of fraud to the senior management except for management fraud which will be reported directly to the board of directors, and will be responsible for the compliance of the company's fraud management strategy. 18. The company's board of directors and senior management should identify organizational functions and processes that are subject to a high risk of fraud and design and implement preventive measures to counter that risk accordingly. Policies and Procedures
- Companies should establish clear policies and procedures to implement the fraud management strategy, such as procedures to detect, measure, mitigate and monitor risks of fraud as well as procedures to report and log fraud incidents.
- Companies' fraud policies and procedures should be communicated across the organization and to SAMA upon request.
Contingency Plan
- Companies should design and document a recovery plan to address small and large- scale fraud, and assign a middle-level manager to be in charge of its implementation. In particular, this plan should:
a) Detail the escalation steps of the fraud. b) Stress the need to preserve evidence. c) Require to bring in an external expert if necessary (e.g., auditor, IT specialist, etc.).
Training
22. Companies should provide anti-fraud training to staff, management and members of the board of directors, and to new recruits as part of their induction programs. 23. The scope of the training will vary depending on the role and responsibilities of individuals but should include at an introductory level an overview of the company's fraud management strategy and a detailed review of the policies, procedures and internal controls implemented. 24. Employees holding key positions (e.g. premium collectors, claims settlers, internal auditors, etc.) should be dispensed more comprehensive fraud training, covering in addition to topics stated above: a) Overviews of the relevant laws and regulations. b) Workshops using real fraud cases and examples. c) Reviews of internal and external fraud reporting procedures. Reporting
Companies should have internal procedures to report fraudulent and suspicious activities to designated members within the organization and law enforcement agencies, while guaranteeing anonymity and confidentiality of the denunciations. A reference to these procedures should be made in the contingency plan.
In addition, these procedures should be communicated to new recruits upon induction and be made readily available to staff (e.g., on the company's intranet).
- Companies should communicate their reporting policies and procedures internally and externally (e.g., on the company's website).
Information Exchange
- Companies should share information on incodences of fraud as well as fraudsters with relevant authorities and with SAMA.
Part 3: Anti Fraud Standards
Section A: Internal Fraud
Detection
Internal fraud can be committed by the company board members, management, and staff in any of the business activities of the company. Fraud can be detected in overall business practices as well as personal conduct or attitude.
Typical internal fraud indicators are provided in Table I.
Measure
- Companies should define clear and well documented policies and procedures to measure internal fraud. The implementation and efficiency of these procedures should be verified by internal auditors yearly and a report regarding fraud occurrence, trends and mitigation efficiency should be submitted to the board of directors.
Mitigation
30. Companies should define transparent and comprehensive policies when dealing with internal fraud, highlighting in particular: a) The role of the board, management and staff when dealing with internal fraud. b) The enforcement measures to be taken against fraudsters. c) The relevant law enforcement authorities notification procedure. 31. Companies should restrict the access to cash and electronic transfers by: a) Setting up physical and procedural security measures over the availability and use of cash, assets and information systems. b) Arranging for cash and electronic transfers to be dealt with by more than one person. 32. Companies should enforce strict information technology rules, including but not limited to: a) Restricting the physical access to computer server rooms. b) Monitoring access rights to networks. c) Limiting and monitoring remote accesses to networks. d) Controlling and renewing network passwords on a regular basis. e) Implementing network security and auditing trail. 33. Companies should, prior to hiring permanent or temporary personnel, thoroughly screen and perform background checks to ensure the integrity and the proper moral values of potential recruits. 34. Companies should promote a culture of integrity and accountability within their organizations, e.g., by developing an internal ethical behavior manual that promotes proper conduct and good values. 35. The organizational structure of companies should be built around the following principles: a) Job descriptions should be defined clearly across the organization, detailing roles and responsibilities of management and staff. b) Functions that might be susceptible to conflict of interest should be separated. c) Vacations and job rotations for management and staff in key sensitive positions should be mandatory. 36. Companies should maintain comprehensive and complete personnel records for a sufficient amount of time after the personnel's departure. These records can be accessed by SAMA examiners upon request. Monitoring
- Companies should enforce thorough management and staff supervision policies, particularly for key positions within the organization.
- Sensitive activities should be subject to the dual verification principle, i.e., be submitted for verification by another staff member from a different department within the organization.
Section B: Service Provider Fraud
Detection
39. Since they handle most market-facing activities (e.g., distribution and claims settlement), insurance service providers are at the heart of the relationship with the policyholder. Consequently, insurers should enhance close collaboration with insurance service providers to detect and combat internal and policyholder fraud at their level, while monitoring the insurance service providers themselves for insurance service provider fraud. 40. Typical insurance service provider fraud includes: a) Withholding premiums collected by policyholders until a claim is reported. b) Insuring fictional policyholders while paying a first premium, collecting the commission and ceasing the insurance. c) Conspiring with policyholders to commit fraud. Typical insurance service provider fraud indicators are provided in Table II Measurement
- Insurers' internal auditors should assess the fraud risk of all contracted insurance service providers on an annual basis in a report to be submitted to the board of directors. In particular, this report should contain for each insurance service provider:
a) A review of the business (e.g., volume, nature of transactions, trends, etc.) of the insurance service provider. b) An assessment of the risk level, trend, and occurrence of fraud (if any). c) An overview of the insurance service provider's key processes which represent the highest risk of fraud. d) A profile of staff members handling key market-facing activities, e.g., sales and claims managers. Mitigation
42. Insurers should take the necessary fraud risk mitigation measures to select and deal with reputable insurance service providers. These measures include but are not limited to: a) Enforcing a well defined and documented screening procedure for the appointment of new insurance service providers. Such a procedure should require applicants to disclose all relevant information about their business and contain steps to: i. Evaluate the references and reputation of potential new insurance service providers. ii. Assess their financial situation and solvency. b) Setting fraud management agreements with each contracted insurance service provider. Such agreements should: i. Require the insurance service provider to comply with the insurer's anti-fraud policies, procedures and controls. ii. Stress the enforcing sanctions in case of non-compliance. 43. To minimize the risk of fraud, insurers should: a) Avoid paying a commission before the first premium is collected. b) Avoid paying commissions beyond a certain percentage of premiums paid. c) Keep parts of the commission in a temporary deposit account when dealing with unknown or new insurance service providers. d) Send policies and renewal documents directly to policyholders. e) Request from insurance service providers not to accept cash payments of premiums. Monitoring
- Insurers should define appropriate indicators to flag insurance service providers with higher risk of fraud.
Section C: Policyholder Fraud
Detection
45. Policyholder fraud is committed by policyholders and/or third parties mainly at the policy setup and claims management stages of the client relationship. Consequently, companies should design and implement procedures to combat the main types of policyholder fraud, which include but are not limited to: a) At the policy setup stage: withholding or providing incorrect personal or background information. b) At the claims filing stage: i. Submitting claims for fictitious damage or loss. ii. Misrepresenting facts to include the claim in the coverage. iii. Overstating cost of damage. Typical policyholder fraud indicators are provided in Table III. Measurement
46. Companies should maintain detailed records of occurrence of policyholder fraud. These records should detail at a minimum: a) The type of fraud. b) The technique and/or technology used to commit the fraud. c) The weaknesses in internal control procedures and deficiencies in processes. d) The fraudsters' profiles and backgrounds. e) The amount of the fraud. These records are to be communicated to SAMA upon request. 47. Internal auditors (or fraud function officer if existent) should prepare and submit to the board of directors on a yearly basis, comprehensive reports detailing fraud occurrence, description, trends, and an assessment of the efficiency of anti-policyholder fraud measures. Mitigation
- Companies should design their policies to minimize the occurrence of fraud. Based on internal auditors' yearly reports and under the supervision of the board of directors, senior managers should implement new anti-fraud measures, procedures and policies and improve existing ones.
- Companies should clearly define and document client filtering policies and set, for each insurance business class and product, the conditions required to accept new clients. These conditions should be subject to the board of directors' approval, and reviewed on an annual basis.
- Companies should define for each insurance product clear and comprehensive claims assessment procedures, detailing in particular the steps to verify the claim's facts and validity and to check for fraud indicators (see Table III).
- Companies should inform policyholders about their anti-fraud policies and the consequences of providing false or inaccurate information. Furthermore, an information section can be included in the text of the policy itself to ensure policyholders read and agree to the measures in place.
- Since insurance business development and customer relationship requirements can conflict with fraud minimizing requirements, companies should determine the right balance between development targets, customer satisfaction, and fraud detection. Consequently, operational and fraud reduction targets should be combined and approved by the board of directors on an annual basis.
Monitoring
- Companies must establish, for each business class and product, appropriate policyholder fraud indicators, trigger levels, and responses.
Table I: Typical Internal Fraud Indicators
Table I: Typical Internal Fraud Indicators
Business practices and conditions Governance
and
Organizational
Structure◄ Single individual or group of individuals acting together drive operations and/ or financial decisions ◄ Company’s strategy changes suddenly ◄ Organizational structure is complex ◄ Executive directors are numerous ◄ Directors, managers, members of staff, external businesses and contractors have conflict of interest ◄ Commission structures are unusual Operational
Management◄ Training programs are weak ◄ Transaction time, place, and parties are unusual ◄ Activities are inconsistent with the insurer’s stated policy ◄ Management turnover is high ◄ Staff turnover is high in financial and/ or accounting departments ◄ Obsoleteness or lack of procedural manuals ◄ Documentation for transactions, processes or expenses is limited ◄ Tasks and transactions are complex and require special skills Accounting
and Finance◄ Assets are restructured without justification ◄ Accounting procedures are weak ◄ Financial results and ratios are uncorrelated ◄ Share value changes without explanation ◄ Costs rise unjustifiably or are high compared to competitors ◄ Financial issues emerge Internal
Control◄ Internal control structure is weak Internal Audit ◄ Information from prior audits is insufficient ◄ Internal audits are weak or non-existing Information
Technology◄ Data and asset security system is weak Complaints ◄ Number of complaints received from external parties is high Conduct Governance
and
Management
Matters◄ Board of directors emphasizes unduly on meeting earning projections ◄ Board of directors and management take undue risks ◄ Board, managers, or members of staff have insufficient levels of income to meet personal debts or financial losses ◄ Board, managers, or members of staff appear to be living beyond their means ◄ Board, managers, or members of staff change lifestyles suddenly ◄ Board, managers, or members of staff display marked personality changes or intense family pressure ◄ Board, managers, or members of staff have a feeling of unfair treatment ◄ Board, managers, or members of staff display extreme greed for personal gain ◄ Board members and managers incur significant increase of expenses ◄ Board of directors and/ or management provide unsatisfactory answers to the supervisor’s or auditor’s questions ◄ Directors and/ or management have a poor reputation in the business community ◄ Board of directors and/ or management display overly aggressive attitude toward financial reporting ◄ Board of directors and/ or management place undue pressure on the auditors ◄ Board of directors and/ or management do not comply with laws and regulations ◄ Board of directors and/ or management display dominant management style, discouraging critical or challenging views from others such as members of staff Working
Environment◄ Morale is low within the insurer or within certain departments of the insurer ◄ Relationships at work are inappropriate or acting of individuals is unusual ◄ Earning ability is lower than that of other comparable insurers ◄ Company faces adverse legal conditions ◄ Managers or members of staff work late, are reluctant to take vacations and display signs of stress Operational
Management◄ Staff recruiting processes contain problems ◄ Management fails to follow proper policies and procedures in making accounting estimates ◄ Processing of payments is done at odd times (e.g., late in the day, after business hours, etc.) ◄ Insiders reduce holdings of insurer’s stock Table II: Typical Insuarance Service Provider Fraud Indicators
Table II: Typical Insuarance Service Provider
Fraud IndicatorsFinance ◄ Intermediary is in financial distress Portfolio ◄ Portfolio is small but has high insured amounts ◄ Number of insurance policies where the commission is higher than the first premium is high ◄ Portfolio contains an arrear of premium payments ◄ Portfolio displays high amount of claims fraud or a disproportionate number of high risk insured individuals, (e.g., elderly people) Operations ◄ Intermediary operates outside the region of the policyholder ◄ Intermediary asks for an immediate or in advance payment of commission ◄ Intermediary asks the policyholder to make payments via the intermediary himself which is an unusual business practice ◄ Intermediary receives premiums and pays commissions that are above or below the industry norm for the type of policy ◄ Intermediary has a relatively high claims ratio ◄ Intermediary has an exceptional increase in production without
apparent reason◄ Intermediary has a high level of early cancellations ◄ Intermediary has a high number of unsettled claims ◄ Intermediary insists on using certain loss adjusters and/ or contractors for repairs ◄ Intermediary changes control or ownership frequently Conduct ◄ Intermediary has a personal or a close relationship with the client ◄ Intermediary changes name and address frequently ◄ Intermediary has a number of complaints or regulatory inquiries Table III: Typical Policyholder Fraud Indicators
Table III: Typical Policyholder Fraud Indicators
General Indicators Claimant’s Behavior General
Conduct◄ Claimant doesn’t do anything to prevent or limit the damage ◄ Claimant provides evasive answers and does not cooperate during a reconstruction ◄ Claimant gives inconsistent statements to the police, experts, and third parties ◄ Claimant hides details of claim to other people (e.g., family, friends, neighbors, etc.) ◄ Claimant handles business in person or by phone, while avoiding written communication ◄ Claimant displays detailed knowledge about insurance terms and claims processes ◄ Claimant checks the insurance coverage shortly before the claimed event ◄ Claimant modifies address, bank or telephone details shortly before a claim is made ◄ Claimant insists on using certain contractors, engineers, or medical practitioners without a convincing reason ◄ Claimant avoids giving information concerning denial of previous insurance when applying for a new insurance Coverage ◄ Policyholder possesses several policies with the same insured object and coverage ◄ Policyholder changes insurers frequently ◄ Policyholder insists on changing terms and conditions ◄ Claimant does remarkable filing of the claim (e.g., claimant seeks help of a lawyer or other professional advice in reporting the claim) Payment ◄ Claimant requests that payment is made in cash ◄ Claimant requests that payment is made into different accounts ◄ Claimant requests that payment is made to a third party ◄ Claimant insists that the payment exceeds the value of the damaged goods Speed of
Settlement◄ Claimant insists on quick settlement of a claim ◄ Claimant threatens to bring in a lawyer if the claim is not settled swiftly ◄ Claimant enquires frequently about the progress of the claim ◄ Claimant accepts a low payment to settle the claim quickly Claimant’s Characteristics Background
Information◄ Claimant provides vague information regarding identity of policyholder and/ or beneficiary ◄ Claimant uses a post office box or hotel as an address, moves repeatedly, gives false addresses, or has a non-matching telephone number and address ◄ Claimant refuses the disclosure of claims history with other insurers Personal and
Financial
Situation◄ Claimant has an usual and/ or difficult occupational situation (e.g., unemployed, self-employed, frustrated with job, facing disciplinary action, seasonal worker, or in an industry experiencing downsizing and lay-offs) ◄ Claimant is experiencing a bad financial situation ◄ Claimant faces a difficult family situation (e.g., divorce) ◄ Claimant has a relationship with known fraudsters or criminals ◄ Claimant has a history in bad claims ◄ Insurer is experiencing difficulties reaching the claimant ◄ Claimant lives in a known fraud area Documents Forms ◄ Application forms are incomplete and/ or unsigned ◄ Claim forms are incomplete and/ or unsigned ◄ Claim forms are modified frequently ◄ Application form and the inception date of the cover are different ◄ Application form and claim form are inconsistent Receipts and
Reports◄ Minor losses are sufficiently documented while major ones are not ◄ Documents/ receipts are unspecific, modified, or unreadable ◄ Original documents/ receipts are missing; only copies are provided ◄ Receipts are new (e.g., not wrinkled, clean) for old events or products ◄ Receipts contain different handwritings ◄ Documents display odd dates (e.g., during holidays, after business hours etc.) ◄ Doubtful receipts are provided, from companies that do not exist, have ceased operations, or are insolvent ◄ Doubtful receipts are provided, with differing dates but with successive numbering ◄ Foreign receipts contain unspecified currency ◄ Reports from medical practitioners or other authorities (e.g., police) are inconsistent ◄ Documentation from foreign countries is different from the expected format or content (e.g., use of incorrect language) Claims’ Characteristics Submission of
Claim◄ Claims are submitted by a third party without proper power of attorney ◄ High claims are submitted frequently ◄ Claims submitted display prevailing connections Timing of
Claim◄ Claim is filed in one of the following cases:
- Shortly after coverage becomes effective.
- Just before cover ceases.
- Shortly after the cover has been increased or the contract provisions are changed.
◄ Loss occurs just after payment of premiums that were long overdue ◄ Damage occurs in the period of provisional cover Size of Claim ◄ Loss is actually far higher than first reported ◄ Loss claimed is just below the threshold that causes additional checks by the insurer ◄ Amounts insured and the characteristics (e.g., age, profession) or life style of the policyholder are inconsistent Indicators Specific to Business Classes Property claims (including disaster fraud) General
Property
Losses and
Claims◄ Losses and the characteristics (e.g., residence, occupation, income, lifestyle, etc.) of the policyholder are inconsistent ◄ Claimed losses and the findings in the police report are inconsistent ◄ Damaged items cannot be/ are not examined by loss adjusters ◄ Destroyed items are in bad shape ◄ Large amount of cash is stolen Fire ◄ Fire affects a single property or building without affecting others ◄ Policyholder, family and pet are absent during a fire ◄ Items of sentimental value (e.g., photograph albums) or family heirlooms are not lost or damaged during fire ◄ Absence of physical evidence of the place where heavy items were located (e.g., indentations in the carpet from furniture ◄ There are multiple sources of fire ◄ Origin of fire is unknown ◄ There is no evidence of burglary in case of arson ◄ Building is unoccupied and without surveillance at the time of fire ◄ Building is disconnected from public utilities at the time of fire ◄ Fire is not detected by fire alarm ◄ Fire alarm is switched off coincidently ◄ Fire alarm is switched on, but blocked by objects ◄ Fire is detected shortly after people leave the building Car Accidents ◄ Car damage and/ or injuries are exaggerated, claims are fabricated or accident is staged ◄ Circumstances of accident are identical as a previous claim or with the same lawyer ◄ Blame on the accident is accepted too easily ◄ Police and/or emergency services are not contacted immediately after an accident with substantial damage ◄ Claim for recovery damage is not made immediately after an accident with substantial damage ◄ Relationship exists between the people involved (e.g., between passengers of the different vehicles, between patient and doctor, etc.) ◄ One of the individuals involved has a rental car ◄ Driver of the rental car accepts blame easily ◄ Eye witness is very cooperative ◄ One of the vehicles involved in the accident is old and the other is new ◄ Severe damage occurs without a collision (e.g., swerving) ◄ Both people involved are foreigners from the same country ◄ Claim involves victims with no own damage insurance and/or one who would be at risk if found at fault ◄ Testimonies are very similar or strikingly different after an accident ◄ Reported injuries are remarkably similar ◄ Damage does not match the injuries (e.g., little physical damage but severe personal injuries) ◄ Inconsistencies in the damage of the cars involved (e.g., one with minor damages, the other with severe damages) ◄ Injuries are difficult to observe objectively (e.g., headaches or whiplash) ◄ Marks at the location of the accident are absent or difficult to find ◄ Accident occurs in a deserted location Car Theft ◄ Vehicle has an unusual registration number ◄ Vehicle has been registered very recently ◄ Vehicle is stolen just after the end of the “new-value period” ◄ Registration certificate is inside the vehicle or is lost before the theft ◄ Vehicle keys are not the original ones ◄ Vehicle alarm is switched on but does not work ◄ Stolen vehicle is recovered completely undamaged ◄ Stolen vehicle is recovered with valuables/ documents ◄ Age or social position of the insured and the make and model of the vehicle are inconsistent Claimants
Conduct and
Employment
Information◄ Losses are described vaguely ◄ Claim is filed with delay ◄ Items are over-insured substantially ◄ Claimant gives very detailed description of the property or a detailed photo report at the preliminary stages of the claim ◄ Lists of property in the claimant’s and the loss adjuster’s reports are in the same order ◄ Items insured are new according to the claimant ◄ Inconsistencies exist in the claimant’s account ◄ Claimant does not want the claim handler to contact his employer directly ◄ Claimant’s employment information is suspicious ◄ Claimant started his employment shortly before the accident occurred Police Reports ◄ Police report is not provided when expected ◄ Discrepancies exist between the claimed losses and the findings in the police report Travel Timing ◄ Loss is reported a long time after the trip ◄ Mismatch exists between insurance term and holiday period Life Policyholder
Information
and Conduct◄ Relationship between the policyholder, the insured and the payer of the premiums is unclear ◄ Policyholder or beneficiary owns several policies with different addresses ◄ Policyholder accepts unfavorable conditions ◄ Insured amount and standard of living of the policyholder are inconsistent Payments and
Beneficiaries◄ Payments are requested to be made to others rather than the policyholder or the beneficiary ◄ Premium is paid in cash ◄ Premium is made in foreign currencies or from a foreign bank account ◄ Payment is made to unrelated third parties ◄ Policyholder and beneficiary have a significant age difference ◄ Beneficiaries of policy are frequently changed ◄ Beneficiary’s name and account number are inconsistent Cancellation
of Policy◄ Request for cancellation of policy or refund of premiums are made shortly after the cooling off period ◄ Request for cancellation is not signed or signed by an unauthorized third party Time and
Place of Death
or Claim◄ Claim of suicide or a criminal offence is made shortly after inception of the policy ◄ Change of policy provisions or beneficiary is made just before death or disability ◄ Insured is claimed dead while abroad ◄ Disability claim is made just after a premium default Missing Death
Information◄ Body of deceased is missing or unidentified ◄ Original death certificate is unavailable ◄ Cause of death or disability is suspicious Transport Operations ◄ Weighbridge is non-calibrated ◄ Goods are delivered after theft ◄ Drivers are paid per trip ◄ Documents are handled without sufficient supervision (e.g., in hotels, restaurants) ◄ Goods are transported to a destination that does not have a market or proper processing facilities ◄ Goods are repacked to larger volume entities ◄ Goods destined to developing countries are over evaluated Inconsistencies ◄ Inconsistencies exist between insured volume/weight and the real weight ◄ Inconsistencies exist between the insured volume/ weight and the type of goods ◄ Inconsistencies exist between the insured amount and market prices Related Parties ◄ Parties involved have a bad reputation in the business ◄ Endorser is different from claimant ◄ Intermediaries are non-cooperative Healthcare Conduct of
Claimant◄ Physicians are changed frequently ◄ Claimant has multiple disability policies ◄ Claimant claims a disability and is involved in active employment or in a physical sport or hobby ◄ Claimant develops additional injuries allegedly related to the initial injury or illness when it appears that the claim will be terminated ◄ Claimant’s illness or injury occurs shortly before an employment problem (e.g., disciplinary action, demotion, layoff, strike, termination, or down sizing) ◄ Claimant visiting more than two medical providers for the same case Conduct of
Physicians◄ Emergency services are not contacted ◄ Prescriptions are cut or altered ◄ Documents contain misspelling or misusing of medical terminology ◄ Improper identification numbers are used ◄ Attending physician is not in the same geographic region as the claimant ◄ Incorrect or conflicting diagnosis from different medical providers are given ◄ Treatment provided to the claimant is inconsistent with the report diagnosis ◄ Treatment is scheduled on holidays or other days when medical facilities are normally closed ◄ Attending physician’s specialty is not consistent with the diagnosis