All kinds of insurance fraud

The case of a young woman hiring someone to cut off her arms and legs to claim compensation of about 3.5 billion VND that happened in Hanoi is just one of many insurance fraud cases that have been discovered and criminally prosecuted in recent years.

The first time an insurance fraud case was discovered and criminally prosecuted was in 2005 with the case of a customer of PJICO Insurance Corporation. Specifically, in October 2002, Song Tien Trading Company Limited signed a contract to sell 16,000 kg of frozen shrimp to Taifun Company.

In November of that year, while transporting goods from Ho Chi Minh City to Germany, a ship carrying 15.8 tons of shrimp worth 144,300 USD caught fire while arriving at the port of the neighboring country. On the same day, Viet Thai Phong Company of Ms. Pham Hong Thu (wife of the director of Taifun Company) filed documents and went to the PJICO - Saigon branch to buy insurance for the shipment to get compensation (110% of the value of the goods, equivalent to 224,928 USD).

The insurance claim process took a long time and finally, Ms. Thu agreed to "pay back" Mr. Tran Nghia Vinh, former general director of Pjico and Ho Manh Quan (deputy general director) if they agreed to pay the insurance (worth 3.8 billion VND). As agreed, after receiving the compensation, Ms. Thu gave a bribe of 1.9 billion VND to Vinh and Quan.

However, the case was later discovered and prosecuted. Ms. Thu was sentenced to 12 years in prison for fraud and appropriation of property, and former PJICO leaders were sentenced to 5 years in prison for abusing their positions and powers.

Regulators claim there are thousands of insurance fraud cases each year.

According to the Vietnam Insurance Association (AVI), in recent years, motor vehicle insurance fraud has occurred most frequently because it is difficult to detect.A rather noisy case was discovered last year after someone filed a complaint. Specifically, from the end of 2012, Mr. Bui Minh Thang, working at the Environmental Police Department of Hau Giang Province Police, drove a Toyota Camry into the river while drunk. In order to get the car insurance money, Mr. Thang asked his wife to call another person to come to the scene to "take the place" of the person driving the car to legalize the insurance documents.

After that, Mr. Thang's family asked this person to take responsibility for driving and causing the accident so that Bao Viet Hau Giang Company (under Bao Viet Insurance Corporation) would have to pay compensation. Based on the above documents, Mr. Bui Hoang Bao (Mr. Thang's father and the car owner) was compensated nearly 350 million VND by Bao Viet Hau Giang Company. However, 3 years later, the "stand-in" wrote a complaint about Mr. Thang's profiteering behavior. The case has now been transferred to the Supreme People's Procuracy for consideration and settlement.

According to AVI, insurance fraud in the health insurance sector also accounts for a large number, second only to motor vehicle insurance products.However, many opinions say that this rate is higher but cannot be statistically calculated, partly because insurance companies are reluctant to bring the matter to public attention, partly because the acts are increasingly sophisticated. According to AVI, the total damage caused by insurance fraud related to people in 2014 was 500 billion VND, an increase of 15% compared to 2013.

A customer named Trang in Kien Giang, who is the owner of an insurance contract, claimed that her son drowned and asked the insurance company to pay out more than half a billion VND. The customer had only been insured for 3 months, and the contract had a large value of over 500 million VND. There were many contradictions about the child's death, sometimes it was stated that the child died in Kien Giang, and other times it was said that the child died in Dong Thap.

Upon verification, the investigator discovered that the boy was actually the son of Ms. Trang's younger brother. Because her brother was in prison and the family was broken up, she adopted him and declared the child's parents' names as hers and her husband's. After only 3 months of the contract, the biological mother asked to take the child to Can Tho to raise, planning to send him to first grade there later.

However, Ms. Trang went back to her husband's hometown in Dong Thap, fabricated the incident and told the police that the child went to his grandparents' house to play, accidentally fell into the river and drowned, and was given a death certificate. She then went back to Kien Giang to make a death certificate and built a small earthen grave in her garden to create a fake crime scene in order to claim half a billion dong in compensation.

The customer calculated every move very carefully, arranging many moves in advance. Due to their relationship, the local authorities also supported Ms. Trang in providing documents such as death certificates, full signatures of the scene reports... However, after 3 months of investigation, this customer had to admit that he had staged the incident and submitted a request to withdraw the request for insurance benefits payment.

The leader of an insurance company also recounted the insurance fraud case in Vung Tau in 2003-2004. This unit received a request for compensation from the family of a deceased insurance buyer, whose death occurred exactly one week after participating in the life insurance contract. Afterwards, the insurance company staff went to the cemetery to read the information on the grave to verify the date and time of death and discovered that the family had colluded with the local authorities to delay the date of making the death certificate, then proceeded to buy insurance for the deceased.

According to the report of the Insurance Management and Supervision Department (Ministry of Finance), in the period 2007-2014, the total number of insurance fraud cases detected and having specific evidence to refuse insurance payment was nearly 64,000 cases, an average increase of 31.3% per year. The total amount of fraud was about 850 billion VND, an average of nearly 110 billion VND per year. That does not include the compensation records showing signs of fraud but without clear evidence to refuse payment. There are insurance companies with large market shares, the number of fraud cases is up to 2,000 cases per year.

According to VNE