New measures to reduce insurance fraud
New measures recommended by the Insurance Fraud Taskforce (IFT) are to be introduced to challenge insurance fraud and lower costs for customers.
The IFT was set up in January 2015 to assess the scope of insurance fraud and recommend steps to tackle the problem.
The main issues it highlighted were that insurance fraud is not always recognised as a criminal act, a level of popular distrust of the insurance industry and a wide-ranging lack of understanding as to how insurance works.
The new measures will help tackle fraudulent activity ranging from organised crime to opportunistic fraud. The recommendations include:
- improving customer trust in the insurance sector and identifying all instances of insurance fraud as a criminal activity
- encouraging data sharing and collaboration between the insurance sector and regulatory bodies
- clamp down on unnecessary whiplash claims, which are a major source of fraud.
Neither the IFT nor the government has commented on when the recommendations are likely to be legislated.
Harriet Baldwin, economic secretary to the Treasury welcomed the news to tackle insurance fraud:
“These recommendations will galvanise our collective efforts to tackle insurance fraud, and will ultimately reduce costs for consumers.”
James Dalton, director of general insurance policy at the Association of British Insurers, added:
“The industry will do whatever it takes to protect honest customers from the dishonest minority, including ensuring that customers understand exactly what they are covered for, so that they can get the most from their insurance legitimately.”
Talk to us today to find out more information on insurance fraud.