In the realm of life insurance, where trust is essential, there is a dark underworld of deception and exploitation.
Individuals rely on insurance plans to provide financial stability in times of need, and, in the case of life insurance, to ensure that loved ones are cared for in the event of a disaster.
However, underlying this veneer of confidence lurks a darker reality: the widespread incidence of insurance fraud. There have been claims that many people insure relatives, family members, and unrelated persons for lucrative payouts upon their demise.
This fraud scheme has been flourishing in recent years. Mainly using that space in insurance companies, various individuals insure others without their knowledge through forged/‘stolen’ documents.
Consent is rarely applied in insurance circles, especially death insurance, yet it lies at the heart of every policy sold by insurance firms. This is what I call a ‘missing consent’ scenario from the insured person by the insuring person, since there is no regulation to see or talk to the insured person to make sure that they are aware of or consents to the policy.
Consent is an ethical issue associated with how insurance policies and services apply to the individuals and if the insured person is really in agreement with all the conditions stipulated therein.
There are claims that many brokers get only implicit consent from an insuring person, and that has the insurance firm interpreting a decision from something the insured person doesn’t understand if his/her ID is available for registration.
Since there is no consent from the insured person, this leads to several people affected by identity theft, fraud, and data breaches, which is assumed to have spiked in recent years.
To make sure the insured person has agreed to the policy, there is a need to contact the person face-to-face, other than just to register a person through his/her ID, while the insured person is not physically there. Around the world, the use of consumer data in the insurance process is governed by a variety of different sets of legislation, for example, insurance, consumer protection, and/or data privacy legislation.
Most markets have some form of legal protection in place to govern the access, use, processing, disclosure, and transfer of personal data.
I would recommend that insurance firms talk to insured individuals about insurance policy registration to map out fraudulent activities or unconsented registration of policies. There should be a regulation that every insurance firm needs to be implementing as well as the authority overseeing the insurance companies in Namibia.
To combat insurance fraud, there should be a multidimensional approach that includes technology innovation, regulatory enforcement, consumer education, and industry collaboration.
Prioritising fraud prevention activities can protect the integrity of the insurance system, build confidence among stakeholders, and ensure the industry’s long-term sustainability.
– Leonard Kanime
