Insurance fraud : quo vadis?

Abstract

Annually, insurance fraud is costing the industry, billions of dollars, globally. This financial crime is not only affecting the insurance industry, but the cost of fraud is also being indirectly suffered by the consumer through higher premium payments. This is a vast and complex topic with which many elements have to be taken into consideration to be able to find comprehensive long-term solutions to fight an ongoing battle in minimising such fraud. As many other types of fraud, criminals change their strategies as new laws are being implemented. There is no one solution and any solution can never fully respond to all types of insurance fraud. The point is that solutions vary from administrative perspectives to legislative ones and both complement each other. This thesis aims to analyse the legislation which is being adopted by various jurisdictions and the manner in which fraud is tackled within legislative frameworks, without eliminating the administrative elements, which have to be in place in support of any legal proposals. During this research major weaknesses and obstacles have been identified which do not give the proper medium to effectively eliminate these crimes with each jurisdiction having its own methodologies on how to tackle fraudulent activities, bringing on a lack of harmonisation especially when it comes to cross-border fraud. This can be seen both in federal systems such as the USA as well as legislative frameworks like the EU.