Fraud Detection Policy

Introduction

The Insurance Development and Regulatory Authority of India (IRDAI) mandates a proactive fraud detection policy for insurance e-commerce activities. This policy outlines PolicyCounter's approach to preventing, detecting, investigating, and mitigating insurance fraud.

Objective

This policy is designed to:

  • Prevent, detect, investigate, and mitigate insurance fraud.
  • Develop processes to identify, address, and manage fraudulent activities.
  • Implement control measures at the organizational level.
  • Conduct thorough investigations of suspected fraud.
  • Maintain a fair and ethical business environment.
  • Adopt a zero-tolerance approach to fraud by internal and external stakeholders.

Applicability

This policy applies to any suspected or confirmed fraud involving:

  • Officials and employees
  • Shareholders
  • Vendors
  • Contractors
  • Business associates
  • Policyholders
  • Assignees
  • Claimants
  • Nominees
  • External agencies
  • Any other party with a relationship with PolicyCounter

    • Investigations will be conducted regardless of the suspected offender's position, tenure, or relationship with the company.

    Classification of Insurance Frauds

    IRDAI defines insurance fraud as an act or omission intended to gain a dishonest or unlawful advantage. This may involve:

    • Misappropriating assets
    • Misrepresenting, concealing, or suppressing material facts
    • Abusing a position of trust or fiduciary relationship

      • This policy outlines measures to address the following broad categories of fraud:

      Internal Fraud

      Fraudulent activity committed by PolicyCounter's directors, managers, employees, or anyone else against the company. Examples include (but are not limited to):

      • Embezzlement (misappropriation of money, securities, supplies, property, or other assets)
      • Fraudulent financial reporting (forging or altering accounting documents or records)
      • Cheque fraud (forgery or alteration of cheques, bank drafts, or any other financial instrument)
      • Overriding decline decisions to open accounts for associates
      • Inflating expense claims or overbilling
      • Paying false or inflated invoices
      • Permitting special prices or privileges to customers or suppliers in exchange for kickbacks or favors
      • Forgery or alteration of company documents or accounts
      • Conflicts of interest resulting in financial loss
      • Payroll fraud
      • Tax evasion
      • Unauthorized use of confidential information
      • Unauthorized manipulation of IT networks or systems
      • Improper pricing activity

      Policyholder Fraud

      Fraudulent activity committed by a policyholder against the company during the purchase and/or execution of an insurance product. Examples include (but are not limited to):

      • Staging incidents
      • Reporting fictitious damage or loss
      • Unauthorized transactions on policies (switches, withdrawals, surrenders)
      • Unauthorized changes in contact details
      • Cash or cheques handed over to agents without receiving intimation from the company

      Third-Party Fraud

      Fraudulent activity committed by a third party against the company. Examples include (but are not limited to):