Insurance companies urged to maintain professionalism
Insurance companies must improve internal processes as well as put fit and proper test on insurance investors, directors and personnel to combat insurance fraud, Insurance and Pensions Commission (Ipec) commissioner, Tendai Karonga has said.
Karonga told delegates at the Zimbabwe Association of Funeral assurers meeting yesterday that the creation of a central data base for circulation in the industry was essential in mitigating increasing cases of insurance fraud.
“Ensure fit and proper test are done on investors, directors and key personnel of the insurance industry. Insurance companies are implored to improve their internal processes. There should be creation of a central data base on frauds for circulation to industry and litigation. Issue corporate governance guidelines and enforce S-Rating to insurance agents and employees. Enforce water tight claim processing and internal control systems,” he said.
Karonga said that a recent survey that the Commission carried out through QED Actuaries and Consultants ,revealed that the growth in the industry’s claims ratio was also attributable to insurance fraud.
In 2016, Old Mutual Assurance Company suffered from insurance fraud caused by a nurse who preyed on terminally ill-patients admitted at Kwekwe General Hospital in cahoots with her boyfriend.
Also this year there was the case of syndicate insurance fraud involving National University of Science and Technology student attached at a local insurance firm who was implicated in a $12 000 motor insurance fraud.
Insurance fraud depletes the insurance pool thereby exposing insurers to failure with consequences of wrecking industry growth and profitability thereby threatening sustainability of the industry.
Freeman Muusha, provincial registrar for Harare Metropolitan, suggested to delegates that funeral benefits be awarded after the issuance of the death certificate than the burial order which can be manipulated by fraudsters.
“Only a death certificate is provided by law for one to attain funeral benefits because it’s difficult to attain a fake death certificate. Death certificate is better because it is the only document used to authenticate the death of a person. It is not our role that insurance companies use this particular document to pay for benefits. It is just a suggestion,” he said.
However, delegates urged the registrar general’s office to improve the features of the burial order to make it difficult to be counterfeited and automate its systems such that it has interface with funeral assurance companies to stamp out fraud.–newsday