Fraud Awareness



Few months ago, a racket was busted by Police somewhere in the Southern district, wherein five fraudsters were arrested on charges of being involved in fraudulent life insurance claims by killing people and projecting the deaths as due to road accidents. They used to deliver forceful blows on the chest of the victims to kill them and later used different vehicles to run over their bodies.

The fraudsters in connivance with family members of the deceased and others claimed insurance amounts from different private insurers to the tune of more than ₹1.59 crore after making road accident claims aggregating over ₹3.39 crore. The prime accused, who earlier worked in a finance firm, conspired with other accused and during 2013-2017 committed at least five offenses–four murders and portrayed one natural death as accidental deaths, police said.

They used to select sick people and those addicted to liquor and convince their family members and also bought term insurance policies by paying a premium on their behalf. They used to agree with the family members that, only 20 percent of the claim will be given to the family and the rest will be theirs. After a few months, the gang kills the sick ones and will portray it as an accident. After killing such insurance policyholders, the accused used to portray it as accidental deaths to claim double insurance amounts from the insurance companies. They take an FIR from the police and claim insurance with its help. Bank staff is also managed with bribes, along with third-party members who come to trial. After getting the insurance claim they later shared the claim amount with their family members and others. 

Police took up investigations and the medical and post-mortem reports revealed the cause of death of the man due to homicidal injury. During the investigation and after questioning the man’s family members, the five were arrested. However, the modus operandi came to light after police got information that on February 24 this year, a man was killed but it was projected that he died in a road accident.

According to Police, there were three more such cases in the pipeline that would have meant the sure death of three persons, wherein the gang took policies worth Rs. 1.8 Crore in the names of these three persons and were ready to execute their plan.

It has been found that the main accused in this case, had earlier worked in one Finance company and learned the process of claiming insurance policies. He then hatched a plan to make easy money through insurance fraud. On inquiry, it was also found that another 15 persons, including some insurance agents, claim investigation officers, and a bank employee had also helped the gang in fraudulently claiming these insurance monies.

Is this the first or the only one which has happened with such modus operandi? Not at all and the colleagues from Insurance Industry would agree that this is not the first such case, which has been planned and executed in such an organized manner by these fraud nexuses. They may remember so many such cases which they may have encountered in the recent past as well. One may find several such cases in the last few years from various parts of India with similar modus operandi causing huge losses to the Insurance Industry.

Although insurance fraud is nothing new and had been prevalent in some form or the other for ages. One may recall that earlier fraud used to be cases, wherein mostly the same was committed by one or two persons like policyholders/nominees/family members himself/herself either singly or jointly or at the most by Individual salespersons. However, this has changed in recent times and most of the fraudulent claims are being found to take place wherein the same is done in an organized manner by these Fraud Nexus who may be from various key touchpoints/offices including those from Village Panchayats, Municipal Offices, Medical Centers/Hospitals, Police Stations, Banks, Insurance Companies, Investigating Agencies, etc. and gang up together to plan and execute such frauds. In all this, the actual Insured or his/her family may not be in the picture at all or at the most be used as a conduit for executing such frauds seamlessly.

(To be continued…Look for this space to read more!!!)

Coming up –

a. Key Modus Operandi& Impact

b. Prevention mechanism to such Frauds

Disclaimer – This blog material is written and edited based on my experience and also information available across the web, industry, and experts. The intent of this blog is purely for the purpose of education and awareness only and nothing personalized.


Ajay Kumar Kanth, Founder, FACTpace

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