NCJ Number
138750
Date Published
1991
Length
150 pages
Annotation
The prevalence and nature of insurance fraud in Finland are discussed, as well as factors that affect the level, structure, and development of insurance fraud; particular attention is paid to the significance of the opportunity to commit fraud, offender attitudes, and fraud control.
Abstract
The prevailing opinion in Finland's insurance industry is that 5 to 10 percent of claims involve fraud. Such fraud has resulted in a loss of $100 to $200 million annually. The considerable increase in the opportunity for fraud is seen as one of the most important factors explaining the growth in insurance fraud. A major expansion in the insurance market has occurred over the past few decades, and this expansion has increased the number of policyholders. The growth in the volume of the insurance business, the laxity of insurance coverage terms, and the haphazard nature of fraud control have also facilitated the growth of professional and habitual insurance-related crime. The role of claim settlers in controlling fraud and in identifying suspect cases is important, since they are the first to deal with claims. The process through which fraudulent insurance cases are detected varies. The normal process is that the claim settler's attention is drawn to a claim's suspicious feature. In some companies, for example, certain types of damages and losses of a certain amount are automatically sent to insurance detectives for investigation. After a fraud has been detected and the case has been solved through criminal investigation, the insurer has different alternatives in closing the case. Generally, the insurance company uses the legal remedies allowed by Finland's Insurance Contracts Act or the terms of insurance. The most common way to close a case is to refuse to pay the claim. Difficulties in gathering evidence represent the most important factor influencing an insurance company's decision on whether to turn a fraud case over to the police. In general, the increase in professional insurance fraud constitutes a threat to insurance companies and requires them to reconsider their options in preventing such crime and to invest more resources to control the problem. References and tables