Question

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.

Part one : 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?

Part two:

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?

Answer 1

part one: Considering two primary goals of the claims function, cliams representatitive is responsible for keeping insurer's promise and supporting insurer's profit goal. Also, he is responsible for protecting insurer from fraud cliams. When the claims representative suspect the items included in the claim, he has to refer the case to insurance claims investigators. They will investigate the genuiness of the claim and the insurer will pay only to the stolen items for which the insurance was previously taken. This process will surely keep the insurer's promise and also insurer's profit.

Part two:If I was the claims representattive and had this ethical dilemma, I would have applied the professionalism required as the claims representative.The loss/damage shoud be covered by the pre-signed insurance policy.Therefore,  I would recommend the case to claims investigator through which I protect and balance the interests of the insured and the insurer. After thorough investigation the insured may get his full cliam if the claim is a genuine one.