ALL life and non-life insurance companies are now required to formulate and maintain procedures for monitoring and early detection of insurance fraud, regulators said.
The Insurance Commission has laid out the necessary guidelines in a circular signed by the Insurance Commissioner Emmanuel Dooc, which it issued on Tuesday.
The guidelines took effect immediately and insurance companies will have to file their respective anti-fraud plans to the Insurance Commission within one year.
Dooc said the concept of mandating the submission of an insurer anti-fraud plan was developed to encourage insurers to proactively fight insurance fraud.
“It is necessary that all insurance companies are ready to combat insurance fraud for its own protection and for the welfare of its stakeholders. To adequately protect itself from the risks posed by insurance fraud, every insurance company should have an appropriate framework in place to prevent, monitor and investigate its occurrence,” he said in a statement issued Wednesday.
According to him, anti-fraud plan should include measures to protect the company from policyholder and claims fraud, intermediary fraud perpetuated by an ordinary insurance agent, general agent, insurance brokers, management company of a consortium and adjusters, and from internal fraud including those committed by the director, manager and/or any other officer or employee.
Insurers are required to observe the minimum standards set forth in the guidelines concerning their anti-fraud efforts–including prevention detection and investigation of fraud, reporting of fraud, and anti-fraud awareness, education and training.
The guidelines also require the inclusion of a fraud warning in the claims form or any document to be filled up by an insured in making a claim.
The Insurance Code, as amended by Republic Act 10607, imposes a penalty of fine and/or imprisonment on any person who presents or causes to be presented any fraudulent claim for payment of a loss under a contract of insurance and who fraudulently prepares, makes or subscribes any writing with intent to present or use the same or allow it to be presented in support of any claim.
Dooc said the guidelines provide only the minimum requirements for insurance companies in the preparation of a new or revision of its anti-fraud plans in order to provide flexibility for each company to adopt an anti-fraud plan suitable to their own circumstance.
“Insurance companies must be organized and its businesses must be conducted in such a way that they are able to monitor fraud risks across all lines of their businesses on a continuing basis and to initiate measures to address them suitably in order to enhance their financial risk management,” he said.