In a first for the insurance industry the Ethics Institute has recognised the efforts made by short-term insurer, Santam in curbing fraud and misconduct in the workplace. In this respect, the Santam Fraud Line has been awarded a Certificate of Assurance based on international Fraud Line best practice standards.
The Fraud Line was put into service over 10 years ago to provide a platform for Santam employees, intermediaries, policyholders, and the public to report information on fraudulent activities, and ethical misconduct – from within the organisation as well as across the insurance sector.
To date, the hotline has been an effective channel in reporting more than 1150 criminal cases leading to more than 300 convictions over the past decade.
The reports included cases of:
• Inflated claims where the policyholder submitted a valid claim for a genuine loss, but deliberately inflated or overstated the value of the claim amount, also referred to as claim padding.
• False claims where the policyholder submitted a claim for an insured event that did not materialise. There was no insurance cover for the specific item at the time of loss or that specific type of cover was not available at the time of loss.
In a recent conviction a couple from Bellville; Garth Petrovich Adonis and Rochelle Klassen-Adonis, both 38, were sentenced to five years imprisonment, wholly suspended for five years, following a plea agreement. The pair were arrested following allegations that they had staged a burglary at their home and then claimed about R500 000 from insurance. Part of the agreement was a confiscation order for R5 000 each.
Helen du Toit, head: Group Audit and Business Integrity says, “Santam is one of the few organisations in South Africa that operates an internal fraud line. Our success in investigating and prosecuting insurance crime cases is highly dependent on information that we receive from callers on our fraud line.
“It is estimated that insurance fraud potentially cost the industry between R2-3-billion, and therefore a Fraud Line becomes a useful tool to expose incidents of insurance fraud.”
The internal fraud line is governed by a strict set of principles and procedures to ensure that the rights of staff, brokers and policyholders’ as well as their identities and actions are protected.
Liezl Groenewald, manager: Organisational Ethics Development at the Ethics Institute says: “While the Santam Fraud Line cannot be officially certified (as it operates as an internal channel as opposed to independent whistle-blowing hotline service) we are recognising Santam with a certificate of assurance as the Fraud Line is aligned with best practice standards. We congratulate and commend Santam for the sterling work that is being done in building an ethical culture and fighting misconduct and fraud in the sector.”
Du Toit adds, “We became a member of The Ethics Institute in 2016 and are humbled and honoured by the acknowledgement. Ethical leadership is critical now so more than ever. We are proud to play our role in setting the tone and contribute towards ethical leadership in the insurance industry,” concluded Chetty.
Santam has also recently joined the Coalition for the promotion of Ethical Operations (the CEO Initiative) to show its support in promoting ethical business and good governance in the sub-Saharan region. This initiative is currently being driven by SNC-Lavalin (www.snclavalin.com) as part of the group’s programme to positively impact the business environment in the sub-Saharan region.