The Netherlands Launches Test Case: Insurance Fraudsters in Court Without Police Investigation

The Public Prosecution Service is conducting a series of test cases against insurance fraudsters without any investigation by the police. The detective work is done by the insurer itself. The aim is to take legal action against more insurance fraudsters without burdening the police. According to the Public Prosecution Service, the police currently fail to investigate many fraud cases due to a lack of personnel and because other cases, such as violent crime, are given priority. In 2017, more than 28,000 cases were investigated by insurers. They uncovered fraud amounting to 101 million euros, according to figures from the Dutch Association of Insurers. The actual amount of fraud involving non-life insurance is estimated to be four times higher.

“For years there has been a lot of insurance fraud, especially involving accident insurance, but only a small number of these cases are brought before the criminal court”, says public prosecutor Petra Willemse. The Public Prosecution Service hopes that the higher number of criminal proceedings against fraudsters will also have a deterrent effect. “Eventually you and I will pay for the loss in the form of a higher insurance premium”.

Staged accident

Willemse started the first two test cases in Rotterdam this week. One of these criminal cases involves two men from Dordrecht (26 and 35 years old) who staged a traffic accident at an intersection in Dordrecht in 2017. They claimed over 5,400 euros. Insurer Achmea discovered that the collision form had been falsified and compiled the criminal file itself. This investigation showed that the cars collided with each other several times, something that seems impossible in a single collision. It is likely that two more case files will be eligible for the 'testing ground' that the Public Prosecution Service has set up together with the Dutch Association of Insurers and the police.

Where is the boundary?

It is not yet clear exactly where the boundary lies when a criminal file is compiled by a private party. During the first test case, Willemse cautiously expressed the view that limited police deployment may continue to be necessary. “Interrogation of the suspects, for example, could remain a police task”, she said afterwards. She also stressed that the criminal files are compiled by expert fraud coordinators. “Often they are former police officers”. According to the Dutch Association of Insurers, every family in the Netherlands overpays tens of euros in premiums each year due to insurance fraud. The most common types of fraud are motor insurance, followed by fire (building and contents policies) and liability. When an insurer has exposed a fraudster, it can do several things: recover the amount of the claim, cancel the insurance, put the fraudster on a warning list for other insurers and report it to the police. Since the summer of 2016, the insurer can also impose a penalty of EUR 532. In the first year and a half this yielded half a million euros.

Limited police capacity necessitates new approach

According to spokesman Oscar van Elferen, insurers are not focused on small items that are charged to travel insurance, although this is also objectionable. Rather, they are mainly concerned with the prosecution of larger-scale fraudsters, who are currently not being prosecuted due to a lack of police capacity. This limited police capacity is a growing challenge not only in the Netherlands but, for example, also in the United States, Great Britain and a number of Latin American countries.

Finding the truth

Finding the truth has always been an important issue for all parties. In principle, there will be little change in this. “For each claim, the insurer considers whether the claim is covered by the insurance policy and it is therefore entitled to assess the claim’s legitimacy. If there are initial doubts about this, the claim is passed on to a department that has the capacity and skills to find out the facts”, according to Gerwin Marskamp, Product Manager SIU at FRISS. “This fraud department will also always try to find out the truth. On the basis of the facts that are collected, the insurer reconsiders whether the claim should be accepted. In all cases, it is important to record this investigation carefully, in the most structured and factual manner possible, including all documents received and interviews held with all those involved. This is the essence of being an insurer. It is well known that the Police have little or no capacity to deal with reports of insurance fraud. We hope that the Public Prosecution Service will actively take up the cases and that more fraudsters will actually be prosecuted and will not get away with fraud because of insufficient police capacity”. From the point of view of establishing the truth, it would be good if several countries were to actively monitor or act upon this progressive test case. In the Netherlands, many insurers are working towards properly documenting their case information and tackling this in a structured way using the core system of FRISS for the Special Affairs department: FRISS Investigations.

  (original source: AD.nl)