Study 2 - Types of Fraud

Question 1

Which type of fraud is categorized as a fraudulent act by a person or an entity, or both, to obtain or change an insurance policy?

Answer 1

Policy fraud

Question 2

What is NOT a characteristic of supplied fraud?

Answer 2

Supplier-internal collusion

Question 3

What is an example of intermediary fraud?

Answer 3

Creating or alternating an insurance policy or insurance record without the knowledge or consent of the applicant or the insured

Question 4

Unauthorized intermediaries act for which type of consumer?

Answer 4

One who naive to insurance processes and products

Question 5

In insurance, what represents a loss or deterioration of integrity of its participants?

Answer 5

Corruption

Question 6

What is NOT one of the most common corrupt acts?

Answer 6

Leading someone to believe something that is not true

Question 7

Which fraudulent act involves a person or entity who provides false information to help another person make a fictitious or exaggerated claim?

Answer 7

Assisting a fictitious or exaggerated claim

Question 8

Other than financial gain, what is another motive for intermediary fraud?

Answer 8

Concealment of errors and omissions

Question 9

Which of the following is an act of soliciting unearned favour, money or any item of value in the course of business as a means to induce or influence a person’s judgement or conduct?

Answer 9

Corruption

Question 10

How is fraud against insurer defined?

Answer 10

Creating a false document, intended to be issued by an insurer
* Altering a document issued by an insurer for profit
* Creating a false document, cheque, or instrument redeemable as payment and purported to be issued by an insurer
* Altering a document, cheque, or instrument redeemable as payment issued by an insurer
* Cashing or redeeming a false or altered document, cheque, or instrument redeemable as payment, issued or purported to be issued by an insurer
* Distributing insurer information or data to a person or entity without the insurer’s knowledge or consent
* Using or deploying software or other electronic means to disable operation of, or access to, a computer system or application containing an insurer’s data until a demand for a sum of money is paid in exchange for regaining control or access

Question 11

Elements of coercion (Occurs when someone is…)

Answer 11

o forced to do something;
o led to believe or accept as true or valid what is false or invalid;
o requested to sign or acknowledge a misleading or incomplete document;
o discouraged or restrained from disclosing information;
o disadvantaged by disability or a language barrier, due to misrepresentation, false impression, trickery, threats, or blackmail;
o made timid, fearful, or frightened due to aggressive or threatening behaviour; or
o the recipient of an utterance or threat of bodily harm or death.

Question 12

How does corruption appear in the insurance industry?

Answer 12

• Corruption represents a loss or deterioration of integrity of its participants.
• Participants are motivated by greed and an expectation or hope of return.
• Corruption also means the act of soliciting, offering, promising, giving, or receiving unearned favour, money, or any item of value in the course of business as a means to induce or influence
• Corrupt acts are directly linked to insurance fraud in two fronts