February 28 2018
With increasing interactions with third parties, greater complexities around data privacy controls, technological advancements and increasing use of life insurance products as a lever for money laundering, the propensity for financial crime has enhanced significantly. The vulnerable areas in the sector are not limited to “claims” or on-boarding.
With the Insurance Regulatory and Development Authority of India (Irdai) releasing a guidance on monitoring and regulating fraud within life insurance companies through the Fraud Monitoring Framework circular, insurers have taken action to implement aspects, specifically in the areas of fraud policies and guidelines, response plans, training and awareness.
However, certain areas still continue to ail. According to a survey by EY, some of the more susceptible areas are: payouts and underwriting; silo-like operational processes; insurance as a means to launder money; transaction monitoring; and data leakage and cyber crime. The findings have been derived from responses of over 100 individuals, representing a majority of the public and private life insurance companies.