Fraud Detection Policy

INTRODUCTION

The Insurance Regulatory and Development Authority of India mandates a proactive fraud detection policy for insurance e-commerce activities. This page captures the policy framework for prevention, detection, investigation, and mitigation of fraudulent activities related to e-commerce.

The Insurance Regulatory and Development Authority of India (IRDAI), vide its Guidelines on Insurance e-commerce bearing number IRDA/INT/GDL/ECM/055/03/2017 dated 9th March 2017, mandates a pro-active fraud detection policy for the insurance e-commerce activities which is approved by the Board of Directors of the Company. Accordingly, the policy has been formulated considering frauds including e-commerce fraud that the company can be exposed to. The policy shall provide guidance with respect to prevention, detection, investigation and mitigation into fraudulent activities related to e-commerce.

OBJECTIVE

The Policy is established to prevent, detect, investigate and mitigate insurance fraud in the Company. It facilitates the development of processes to prevent, detect and manage frauds. It also ensures development of control measures at an organizational level and the conduct of investigations. The Company is committed to conducting business in an environment of fairness and integrity and will strive to eliminate fraud from all operations. The Company adopts a zero-tolerance approach to fraud and will not accept any dishonest or fraudulent act committed by internal and external stakeholders.

APPLICABILITY

The Policy applies to any fraud or suspected fraud involving officials and employees, shareholders, vendors, contractors, business associates, policyholders, assignees, claimants, nominees, outside agencies doing business with the company, or any other parties having a relationship with the company. Any investigation activity required will be conducted irrespective of the suspected wrongdoer's length of service, position, designation, or relationship with the company.

CLASSIFICATION OF INSURANCE FRAUDS

IRDAI's circular bearing IRDAI/SDD/MISC/CIR/009/01/2013 describes fraud in insurance as an act or omission intended to gain dishonest or unlawful advantage for a party committing the fraud or for other related parties. This may, for example, be achieved by means of:

  • Misappropriating assets.
  • Deliberately misrepresenting, concealing, suppressing, or not disclosing one or more material facts relevant to the financial decision, transaction, or perception of the Company's status.
  • Abusing responsibility, a position of trust, or a fiduciary relationship.

In order to adequately protect the company from the financial and reputational risks posed by insurance frauds, the policy is designed to prevent, detect, investigate, and mitigate occurrence of frauds in the company. The policy includes measures to protect the Company from the threats posed by the following broad categories of frauds with illustrative list.

A. Internal Fraud: Fraud or misappropriation against the Company by its Director, Manager, employee and or anyone else.

Illustrative list
The list is only illustrative and not exhaustive:

  • Embezzlement, meaning misappropriation of money, securities, supplies, property or other assets.
  • Fraudulent financial reporting, such as forging or altering accounting documents or records.
  • Cheque fraud, meaning forgery or alteration of cheques, bank drafts or any other financial instrument.
  • Overriding decline decisions so as to open accounts for family and friends.
  • Inflating expense claims or over billing.
  • Paying false or inflated invoices, either self-prepared or obtained through collusion with suppliers.
  • Permitting special prices or privileges to customers, or granting business to favoured suppliers, for kickbacks or favours.
  • Forgery or alteration of documents or accounts belonging to the Company.
  • Conflicts of interest resulting in actual or exposed financial loss.
  • Payroll fraud.
  • Tax evasion.
  • Unauthorized or illegal use of confidential information.
  • Unauthorized or illegal manipulation of information technology networks or operating systems.
  • Intentional failure to record or disclose significant information accurately or completely.
  • Improper pricing activity.

B. Policyholder Fraud: Fraud against the Company in the purchase and or execution of an insurance product.

Illustrative list
The list is only illustrative and not exhaustive:

  • Staging the occurrence of incidents.
  • Reporting and claiming fictitious damage or loss.
  • Insurer reported medical claims fraud.
  • Fraudulent death claims.
  • Unauthorized transactions initiated on policies such as switches, withdrawals, and surrenders.
  • Unauthorized changes in contact details.
  • Cash or cheques handed over by policyholders to agents without company intimation of receipt.

C. Third Party Frauds

Illustrative list
The list is only illustrative and not exhaustive:

  • Fake or forged receipts and or policy documents issued by third parties.
  • Spurious calls by third parties to customers promising inflated returns for purchasing new policies or surrendering existing policies.
  • Online fraud including buyers filing fraudulent claims or making premium payments using compromised payment cards.
  • Merchant-side frauds committed by merchant partners of the Company, including non-remittance of premium or incorrect chargebacks.
  • Cyber security frauds through fake or stolen credit card or bank accounts on the Company's web portal.
  • Data leakage due to cyber-attack or hacking of the Company's systems.
  • Fraud committed by POSP.
  • Other frauds such as phishing emails and social engineering attempts to obtain identity details.

REPORTING MECHANISM

Any fraud detected by any person should be reported to the Compliance Officer as follows:

  • a. by email to: compliance@reliassure.in
  • b. by letter marked "Private and Confidential" and addressed to: Compliance Officer, Reliassure Insurance Brokers Pvt. Ltd., First Floor, Plot no. 42, Plot, DLF Industrial Area, Kirti Nagar, New Delhi, Delhi 110015

Moreover, the person also has the right to make fraud detection information directly to the Principal Officer of the Company as follows:

  • a. by email to: po.reliassure@reliassure.in
  • b. by letter marked "Private and Confidential" and addressed to: Principal Officer, Reliassure Insurance Brokers Pvt. Ltd., First Floor, Plot no. 42, Plot, DLF Industrial Area, Kirti Nagar, New Delhi, Delhi 110015

In case a person has fraud detection information against senior officers of the Company, they may directly reach out to the Board of Directors of the Company by letter marked "Private and Confidential" and addressed to: The Board of Directors, Reliassure Insurance Brokers Pvt. Ltd., First Floor, Plot no. 42, Plot, DLF Industrial Area, Kirti Nagar, New Delhi, Delhi 110015.

INVESTIGATION RESPONSIBILITIES

The Principal Officer, Compliance Officer, or any other authorised person as the case may be, is entrusted with full authority for the investigation of all suspected or actual fraudulent acts as defined in this policy. Necessary support may be taken from concerned departments, external outsourced investigation agencies, and forensic experts. The Principal Officer also has the power to form a team on a case-to-case basis, and such investigation team will be given the rights and authority to investigate company books, desks, cabinets, storage, emails, files, access, or premises as required.

The Legal Team shall initiate proceedings in case of fraud wherever required.

AWARENESS

Employees are regularly given trainings covering Anti Money Laundering, Anti-Bribery and Corruption, and related subjects. Awareness is also created through regular circulars, communication by leaders via email, and town halls or meetings.

REVIEW

The policy will be reviewed by the Board of Directors of the Company as and when required.