Fraud affects the lives of innocent people as well as the insurance industry. Insurance fraud has existed ever since the beginning of insurance as a commercial enterprise. It takes many forms and may occur in any areas of insurance.
An insurance fraud could either be a hard fraud or a soft fraud. A hard fraud occurs when someone
deliberately plans or invents a loss such as a theft of a motor vehicle or setting fire to property
covered by an insurance policy.
Soft frauds are more common and include exaggeration of legitimate claims by policyholders. They are
also referred to as opportunistic frauds.
Insurance companies, their intermediaries or those pretending to be either of them may also perpetrate
frauds. It is important that fraudulent activities are eliminated from the industry and it is the duty
of all stakeholders to do their bit in dealing with insurance fraud.
The IRDAI has come across certain instances of fraudulent activities and has issued alerts to the public
about them
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