THEFT by insurance agents and fake workman compensation claims topped the number of fraud cases recorded by the industry regulator last year, a new report shows.
Insurance Regulatory Authority has revealed that out of the 143 cases received by its fraud investigation unit last year, 30 were due to theft by agents while 22 were as a result of deceptive claims under workman's compensation insurance. However, of all the cases recorded, theft by employees of insurance companies involved the highest amount of money with a total of Sh184.7 million.
The amount involved under fraud by agents amounted to Sh65.8 million and it is not clear whether any recovery has been made so far.
Under theft by employees of insurance companies only a measly Sh3.5 million has been recovered so far.
Complaints against insurance companies involved Sh1.45 million and the entire amount was recovered according to the report. Reported fraud cases involving advocates, auctioneers and medical practitioners were six with the money involved totalling Sh808,963 out of which Sh372,775 has so far been recovered.
Fraudulent motor theft insurance claims recorded were 18 with a value of Sh1.1 million while sham funeral last expenses claim cases were nine with a value of Sh201,850.
Out of all the 143 fraud cases reported, the initial total amount involved in these cases stands at Sh253.7 million but excludes the value in some of the cases like fake personal accident claims which have not yet been detailed. Out of the Sh253.7 million total as at present, only a total of Sh5.3 million has been recovered from these cases so far. This is because 73 out of the 143 cases reported are still under investogation, 39 are pending before court while two cass have been forwarded to the director of public prosecution to offer legal advice. Only 16 cases have so far been finalised with seven cases having been successfully prosecuted in court. The number of accused people charged in court for insurance fraud last year was 55 with five out of these having been convicted already.
However, though the report cites agent-fraud related cases as the highest, the IRA still wants to grow the number of agents in the country adding that these middle men are the best bet to growing the uptake of insurance services especially in grassroot areas.
"Development of insurance agency force in the country is strategic for growing of the insurance industry," said IRA in the report. Last year the number of insurance agents that were registered to operate was 3,317. According to industry experts, some of the fraud cases involving agents include embezzling clients' money especially in a scenario where the agent is not registered but still conducts his or her business illegally without the clients' knowledge.
