Study 9: Insurance Fraud Management in Canadian Society - Summary (Part 2) Flashcards
1
Q
Fraud reporting mechanisms
A
An insurance professional who suspects fraud should collect critical information from emails, voicemails, audio recordings, photographs, video messages, and other documentation to support the suspicion.
2
Q
Examples of helpful documentation
A
- Claim forms (proof of loss, non-waiver, and so on)
- Estimates
- Financial transaction records
- Invoices
- Medical reports
- Photographs
- Work orders
3
Q
Insurance professionals can choose to report fraud through one or more of the following mechanisms
A
- Filing a report with a local law enforcement agency or the provincial or territorial Crime Stoppers organization
- Providing anonymous tips through calls to 1-877-IBC-TIPS (422-8477) or completing online tip forms
- Contacting an IBC consumer information officer
- Alerting the Canadian Anti-Fraud Centre
- Reporting to a professional college or association
4
Q
Stakeholder codes of conduct
A
- Stakeholder: a party with some interest in the business, can be affected by or affect business operations
- Codes of conduct can help stakeholders know what actions to take when a fraud occurs
- Codes of conduct eradicate confusion and minimize fraud
5
Q
Difference between a code of conduct and a code of ethics
A
- Code of ethics: general guidelines and values
- Code of conduct: rules, principles, expected behaviours, and relationships which an organization considers fundamental to its success. Generally more specific than a code of ethics, and includes guidance on how to respond in certain situations.
6
Q
Role of intermediaries in combating fraud
A
- Effectively pre-screen and qualify potential applicants
- Conduct accurate claims-history searches
- Ensure clients understand the risk
- Prevent fraud arising from intermediary operations
- Adhere to the code of conduct and code of ethics
7
Q
Intermediary code of conduct
A
- Ensure employees are qualified to act in their capacity
- Ensure resources are available to supervise employees
- Put in place mechanisms to resolve conflict of interest
- Have internal control procedures and to protect operations, clients and insurers from financial loss
8
Q
Underwriters can prevent insurance fraud in the following ways
A
- Ensure the risk meets the insurer’s risk appetite
- Conduct a proper risk assessment to ensure the risk is desirable
- Maintain ethical standards and practices
- Speak out when fraud is suspected (both internal and external)
9
Q
Code of conduct for underwriters
A
- Maintain high standards of integrity, dignity, and fairness in the conduct of business
- Ensure all professional dealings are performed in a prompt, efficient, and effective manner
- Provide high standards of service, exercise due diligence, and use professional judgment
- Avoid conflicts of interest and make adequate disclosure of such interests
- Be responsible for the acts or omissions of employees and intermediaries with respect to the conduct of business
10
Q
Adjusters can prevent fraud in the following ways
A
- Actively listen to the insured’s loss details when a claim is presented
- Conduct a proper loss investigation for each claim
- Gather and collect all evidence when fraud is suspected
- Assign the special investigations unit (SIU) to further investigate the loss when fraud is detected
11
Q
Code of conduct for adjusters
A
- Promote public confidence in the insurer through fair and consistent dealing
- Provide full disclosure to the insured of coverage for which the policy must respond
- Do not seek or make any secret profit or acquire any financial interest in any matter entrusted to the claims adjuster
- Do not commit any act that reflects negatively on the adjuster’s integrity
- Do not take advantage of a policyholder’s inexperience, lack of education, youth, lack of sophistication, language barrier, or ill health for self-gain
12
Q
Policyholders are afforded the following rights and responsibilities
A
- Right to be informed
- Right to timely and transparent claims handling
- Right to complaint resolution
- Right to privacy
- Responsibility to understand their needs
- Responsibility to provide accurate information
- Responsibility to update their information
- Responsibility to report accurate facts
13
Q
Supplier and vendor codes of conduct include the following
A
- Obey the laws of the jurisdiction
- Conduct business with integrity
- Keep accurate and honest records
- Honour business obligations
- Treat customers with integrity and respect
14
Q
Community prevention strategies
A
- Industry organizations play a significant role in reducing insurance fraud in Canada
- Education programs, ethical standards enforcement, fraud awareness projects, etc.
15
Q
Four main consumer attitudes towards insurance fraud
A
- Realists: low tolerance for fraud but realize it happens, do not advocate for strong punishment, believe sometimes it is justified
- Conformists: tolerant of insurance fraud because they believe many people do it, advocate for moderate punishment
- Moralists: least tolerant of fraud, advocate for severe punishment
- Critics: extremely high tolerance for insurance fraud, blame the industry for the problem and feel insurers to not conduct business fairly, advocate for no punishment
