Study 1 - Introduction to Fraud

Question 1

What does criminal fraud refer to?

Answer 1

A fraudulent act that breaches a prescribed offence committed against society

Question 2

What is civil fraud?

Answer 2

Legal responsibility or liability for damages suffered by a person or entity from a loss that was caused by a fraudulent act

Question 3

How is the degree of possibility of fraud determined when expressed as a general rating?

Answer 3

Manually

Question 4

Characteristic associated with past fraud to determine fraud risk in collision claims?

Answer 4

Age of the driver

Question 5

What is presumed fraud?

Answer 5

A conclusion that evidence or proof collected during an investigation supports a strong likelihood of the occurrence of fraud

Question 6

In the P&C insurance industry, how many stages were original attitude to fraud maturity?

Answer 6

2

Question 7

Which of the following is NOT a fraud prevention strategy?

Answer 7

Intellectual drive

Question 8

What is meant by data detection?

Answer 8

The assessment and alerting of fraud risk by technology or human processing of data

Question 9

What are the two distinct factors required for insurance fraud investigation?

Answer 9

Analysis & investigation

Question 10

Which deterrence strategy for insurers is a principle-based strategy?

Answer 10

Recovery pursuit

Question 11

What can happen when insurance fraud is left unmanaged?

Answer 11

-Increase in frequency
-Acts may become more severe
-Corruption and coercion incidents will likely increase
-Manipulation and deception of insurance consumer will increase
-More participants will be involved in fraudulent acts, including a greater proportion of participants with a criminal history
-Collusion in fraudulent acts and corruption will increase across participants and stakeholders, including insurer employees
-A higher incidence of fraudulent acts will be accompanied by intimidation and violence

Question 12

Key fraud prevention strategies:

Answer 12

-Identification verification
-Negative thinking
-Intelligence
-Avoidance and severance
-Supplier prohibition
-Fraud history record
-Education

Question 13

Key elements of fraud:

Answer 13

-Person or entity
-Deceit or falsehood
-Misrepresentation
-Material information or material facts
-Profit or gaining an unfair advantage
-Post-investigation conclusion