Fraud

 

Lord Sheikh:

To ask Her Majesty’s Government what steps they are taking to tackle insurance fraud.

To ask Her Majesty’s Government what is their assessment of the reported increase in cases of insurance fraud.

To ask Her Majesty’s Government what plans are in place to give companies support in detecting cases of insurance fraud.

The Attorney-General (Baroness Scotland of Asthal): The national fraud strategy provides a framework for the counterfraud community to strengthen the UK’s fight against fraud and make the UK a more hostile environment for fraudsters. The National Fraud Authority (NFA) is dedicated to delivering on a number of initiatives across the fraud spectrum, co-ordinating the implementation of the strategy between government, law enforcement and the private sector.

Insurance Fraud

Whilst there has been a reported increase in insurance fraud, research also shows an increase in the detection and reporting of attempted frauds by the insurance industry. Research by the Association of British Insurers (ABI) highlights improved data sharing through the Insurance Fraud Bureau (IFB) and a more focused approach to detecting fraud has been adopted by the insurance industry.

Information Sharing

As part of the NFA’s initiative to improve information sharing between public and private sector organisations, it is engaging with the Insurance Fraud Bureau and the ABI (among others) regarding the occurrence of fraud. Improving information sharing channels will serve to improve intelligence gathering, the identification of gaps in our counterfraud measures and the detection of fraud to strengthen our response.

Motor Insurance Fraud (Staged Motor Vehicle Accidents)

General insurance fraud costs the industry £1.9 billion per annum, which adds £44 to the average premium of innocent policyholders. Motor insurance fraud, a highly organised multimillion pound enterprise, is a specific area of insurance fraud which has been on the increase.

Staged motor accidents, including induced accidents which occur when an accident has deliberately been caused with an innocent motorist with the intention of making a false or inflated insurance claim, are a particularly dangerous type of motor insurance fraud involving organised criminal gangs.

In response to this problem a Staged Accident Strategy Working Group (SASWG) was formed under the chair of the Ministry of Justice and latterly the ABI. The group, of which the NFA is a member, has worked with the insurance industry to raise the profile of this type of fraud and has been instrumental in instigating and supporting police enforcement action. By way of example, the IFB worked closely with the Greater Manchester Police on the Crash for Cash operation that recently resulted in the sentencing of 19 defendants for their participation in organising at least 92 fake accidents.

National Fraud Reporting Centre

The recent launch of the National Fraud Reporting Centre (NFRC) on 26 October 2009 now provides a single point of contact for individuals and small and medium-sized businesses to report incidents of fraud. The first facility of its kind, the NFRC’s mandate is to advise victims of fraud of action they can take, including directing them to appropriate authorities for further assistance, and to relay information to the police via the National Fraud Intelligence Bureau (NFIB). The NFIB will be able to better identify and detect cases of insurance fraud.

 

Updated: 11/01/2010 — 4:53 PM