A claims representative suspects that an insured has committed fraud in submitting a claim for stolen property by including items that were not stolen. The claims representative believes that the insurer can deny the claim because of the fraud but does not have sufficient evidence to meet the legal standards to prove fraud. The claims representative considers offering less that a fair amount to settle the claim in hopes that the insured will accept the settlement. This course of action would reduce the insurer’s loss from a fraudulent claim, close the claim, and avoid costs associated with trying to prove fraud. However, despite the claims representative’s suspicions, the insured not may not be guilty of fraud and may be entitled to the full amount of the claim. There are several factors to consider with his scenario. Considering the two primary goals of the claims function, which are keeping the insurer’s promise and supporting the insurer’s profit goal, how would they apply to this claim? Ethics and professionalism comply with good faith and are key elements in fulfilling the promises made within the insurance policy. If you were the claim representative assigned to this claim, and your were faced with this ethical dilemma, how would you protect and balance the interests of the insured and the insurer?
A claims representative suspects that an insured has committed fraud in submitting a claim for stolen property by including items that were not stolen. The claims representative believes that the insurer can deny the claim because of the fraud but does not have sufficient evidence to meet the legal standards to prove fraud.
The claims representative considers offering less that a fair amount to settle the claim in hopes that the insured will accept the settlement. This course of action would reduce the insurer’s loss from a fraudulent claim, close the claim, and avoid costs associated with trying to prove fraud. However, despite the claims representative’s suspicions, the insured not may not be guilty of fraud and may be entitled to the full amount of the claim.
There are several factors to consider with his scenario.
- Considering the two primary goals of the claims function, which are keeping the insurer’s promise and supporting the insurer’s profit goal, how would they apply to this claim?
- Ethics and professionalism comply with good faith and are key elements in fulfilling the promises made within the insurance policy. If you were the claim representative assigned to this claim, and your were faced with this ethical dilemma, how would you protect and balance the interests of the insured and the insurer?
Part one: Claims representative is responsible for maintaining the insurer's promise and supporting the insurer's profit goal, which are two primary goals of the claims function. He is also in charge of safeguarding insurers from fraud. When the claims representative has reason to believe the items in the claim are false, he must report the case to insurance claims investigators. They will look into the claim's legitimacy, and the insurer will only pay for the stolen products for which insurance was previously purchased. This procedure will ensure that the insurer's promise is kept, as well as the insurer's profit.
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