FRAUD DETECTION POLICY

INTRODUCTION

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 the insurance fraud in the Company. It would facilitate development of processes to prevent, detect and manage frauds. Further, it will also ensure development of control measures at an organizational level and conducting 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 its officials and employees, shareholders, vendors, contractor, business associates, policyholders, assignees, claimants, nominees and outside agencies doing business with the company or any other parties having relationship with the company. Any investigation activity required, will be conducted irrespective of the suspected wrongdoer's length of services, position/title/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 posted by the following broad categories of frauds with illustrative list.

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

Illustrative list
The list is only illustrative and not exhaustive:

  • Embezzlement (i.e. misappropriation of money, securities, supplies, property or other assets);
  • Fraudulent financial reporting (e.g. forging or alteration of accounting documents or records.
  • Cheque fraud (i.e. 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 expenses claims/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/favours
  • Forgery or alteration of documents or accounts belonging to the Company
  • Conflicts of Interest resulting in actual or exposure to financial loss.
  • Payroll fraud.
  • Tax evasion.
  • Unauthorized or illegal use of confidential information (e.g. profiteering as a result of insider knowledge of company activities);
  • 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, including fraud at any time during the term of the policy.

Illustrative list
The list is only illustrative and not exhaustive:

  • Staging the occurrence of incidents
  • Reporting and claiming of fictitious damage/loss
  • Insurer reported medical claims fraud
  • Fraudulent Death Claims
  • Unauthorized transactions being initiated on policies such as switches, withdrawals, surrenders etc
  • Unauthorized changes in contact details
  • Cash, cheques handed over by policyholders to agents however, they have not received any intimation from the company of its 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 them inflated returns for purchasing new policies or on surrender of their existing policies
  • Online Fraud - This type of fraud is typically a third-party fraud; however, this could involve any of the following types of frauds
  • Buyers filings fraudulent claims or making premium payments using compromised payment cards
  • Merchant side frauds: Frauds committed by any of the merchant partners of the Company which would include non-remittance of premium collected on behalf of the Company and/or incorrect charge backs etc
  • Cyber security frauds: Transactions effected through fake or stolen credit card/bank accounts to carry out a transaction in the web portal of the Company.
  • Data leakage: Threat of confidential data of the Company being comprised due to any cyber-attack/hacking of the Company systems
  • Fraud committed by POSP (Point of Sales Person)
  • Other Frauds: Phishing emails sent to customers promising them inflated returns. Using social engineering techniques to wrongly influence the customers to share their 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, the person has fraud detection information against senior officers of the Company, they may directly reach out 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 the full authority for the investigation of all suspected/actual fraudulent acts as defined in this policy. He will take the necessary support from all concerned departments, external outsourced investigation agencies, and forensic experts, etc for investigation, if required. Moreover, the PO has the power to form a team from case-to-case basis and such investigation team will be given all the rights, authority to investigate, any company's books, desk, cabinets, storage, emails, files or access, to any premises etc., whatsoever to investigate the case.

The Legal Team shall initiate proceedings in case of Fraud where ever required.

AWARENESS

Employees are regularly given trainings covering Anti Money Laundering, Anti-Bribery and Corruption etc. Awareness amongst employees is also created through regular circulars, communication by the leaders via e-mail and at town halls/meetings etc.

REVIEW

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