Cassandra Brix

In order to gain more money inthe now so-materialized world, people and companies have thought of things togain out of greed. Insurance agencies are no exceptions especially in placeswhich have lose insurance policies like Jakarta in Indonesia, South Africa andCambodia. The Federal Bureau ofInvestigation (FBI) had released the most common insurance fraud used by the insurancecompanies.

Premium Diversions

It is considered as anembezzlement of insurance premiums and is considered the most common type. Thishappens when the insurance agent doesn’t wire the money to the insurancecompany and keeps it to himself. Other form of premium diversion scam involvesselling policies without license, collecting premiums and then not payingclaims. Payers are advised to keep track of this kind of fraud by knowing andverifying the legitimacy of the agent.

Asset Diversion

This large-scale scheme involvestheft of insurance company assets held to pay valid claims. This mostfrequently occurs as insurance companies merge, reorganize or change ownership.

Fee Churning

In this scheme, a group of peopleset up a company that will eventually fail. The business gets involved in reinsuranceagreements, and people in different steps of the process pocket commissions.The amount of a premium is cut by each repeated commission until the money topay claims runs out. This scheme lasts as long as it does because eachindividual move looks normal as it occurs. The full picture emerges only afterthe damage is already done.

How to report InsuranceFraud

1.Reportfraudulent behavior to your state’s insurance frauds bureau.

2.Contactthe specific insurance company’s fraud hotline if one is available.

3.Turnin the social security fraud perpetrators.

4.Whenyou are reporting the scheme, make sure to give all pertinent details and anyother documents that may help.

Be Wise. Act Wise.

The most important factor before buyingan insurance plan is to be wise enough to know which agent is legit and whichcompany can be trusted. It’s better to be cautious than regret in the end.Obtain the agent’s name, business identity, telephone number, street address,mailing address, and business license number before you transact bu