All that glitters is not gold…
“The insurance industry will not tolerate fraud and corruption,” says Caroline da Silva, executive at the South African Insurance Association (SAIA) after the latest case of alleged insurance fraud heard in the Witbank Magistrates Court on 16 March.
The case was postponed until April 2004.
Charges were brought against a Witbank panel beater after a joint operation by several short-term insurance companies, together with some of the larger broker firms and the South African Police Services, uncovered fraudulent behaviour taking place over a period of at least one year.
The investigation started in July 2002 when the SAPS received information that insurance fraud was taking place on a large scale on the premises of the panel beater. The premises were infiltrated and several irregularities were reported.
These included claims against insurance companies for parts that were never used, vehicles with accident damage being damaged even further on the premises and elsewhere, and fraudulent invoices being issued.
It is suspected that in some cases the insureds were involved in the alleged fraudulent actions.
The information was analysed by the SAPS and fraud was established. The Organised Crime Unit of the SAPS approached Mutual & Federal to facilitate the participation of the insurance industry to ensure successful prosecution of the accused perpetrators.
Other players that got involved included Santam, Hollard, SA Eagle and Alexander Forbes who joined the SAPS in their efforts to prepare the cases for trial. More than 120 charges of fraud were laid. The estimated value of these cases exceeds R650 000 and involves 10 insurance companies and brokers.
“The insurance industry is sending a serious message to dishonest service providers and policy holders. Insurance fraud will not be tolerated and those who make themselves guilty of corrupt and fraudulent behaviour will be identified and action will be taken against them,” says Da Silva. Action will include prosecution in a court of law.
“Operation Glitter is a good example of excellent co-operation between the SAPS and the insurance industry and the positive results such co-operation can achieve. The SAPS should be commended for their efforts in their fight against crime,” said Da Silva.
This case again highlights the fact that insurance fraud is taking place regularly and on a large scale. This results in higher premiums payable by all policy holders, as honest consumers pay for the fraud of the dishonest consumer.
If you suspect inappropriate and/or fraudulent behaviour could anonymously contact the Insurance Fraudline on 0800 25 26 27.
