In 2022, nearly 20% of French people claim to have defrauded their insurance according to a YouGov and LeLynx study. So, what sanctions are in place to effectively combat insurance fraud? What are the risks and consequences? We take stock together in this article. And as a bonus at the end of the article, an exclusive interview with Emeric Desonyx that answers your most common questions!
Insurance fraud is a manipulation of the insurance system in order to obtain profit from a contract.
To take stock of the players in the insurance industry, read our article: Focus on the different insurance sectors
In this fight against document fraud in the insurance industry, it is theAgency for Combating Insurance Fraud (ALFA) which plays a crucial role. It allows you to create a link between insurance companies and judicial authorities during proven fraud.
Note that fraud risks can occur at various stages of the contract:
1- During the Subscription
2- During the contract lifespan
3- At the time of the claims management
To find out more about the challenges of insurance fraud, go to our dedicated article 👇
Insurance fraud: definition and challenges
According to The article L113-2 of the Insurance Code, the insured is obliged to answer precisely the questions asked before taking out an insurance contract.
However, it is possible that an insured person does not answer the insurer's questions correctly or that he forgets to report a change in situation; he is then responsible. On the other hand, depending on the intention he put in his statements, the sanctions received will not be the same.
What are the differences in sanctions between intentional and unintentional fraud? We'll take stock later in the article!
If an insured person has intentionally defrauded, it is because he has deliberately lied to the insurance department. Two cases are then possible: fraud is revealed when the contract was signed Or is it revealed during the management of the disaster. Let's take a closer look at that.
If the insurance company notices a false statement at the time of taking out the contract, it intends to rely on fraud, it must imperatively demonstrate the dishonesty of the underwriter. However, according toarticle L.113-9 of the Insurance Code, the false information is given in good faith.
👀 Good to know!
According to thearticle 2268 of the Civil Code, theIs the accused always acting in good faith. It is therefore up to the accuser to prove dishonesty. Thus, in the case of insurance fraud, if the insurer finds a false statement, it must demonstrate that the underwriter is dishonest.
If the insurance succeeds in proving the disloyalty of the insured, the consequences may be: Fines And of lawsuits, passing through theTermination of compensation in the event of a disaster, up toComplete cancellation of the contract.
If the insurance company notices a false statement on the part of the insured, during the management of the claim, the penalties will be higher:
👉 Example!
Mathieu and Clara decide to go on vacation to Normandy. On the A13 motorway, they hit another car and ended up in the ditch. When declaring a claim, the insurance company realizes that the car is insured in Clara's name. However, at the time of the accident, Matthieu was driving the vehicle.
In this specific case, the insurance sees a misrepresentation after the disaster, the sanctions for Clara and Mathieu will therefore be heavier.
If an insured person has unintentionally given the insurer wrong information (for example through error or ignorance), he has not deliberately lied to the insurance department. Again, two cases are possible: the error is revealed by the insured or the fault is revealed by the insurer. Let's take a closer look at that.
If the insured notices a fault in his contract, he can Modify it again by indicating it to your insurer. The insurer can then make the necessary changes.
If it is the insurer who discovers the negligence in the contract, then he has two solutions:
It has now become commonplace to make false claims declarations in order to be compensated, wrongly. The aim? Receiving money that one should not have received or have benefits paid for that the insurer would not have paid if he had known the real situation.
In France, this type of scam is punishable by law since it is qualified as Criminal offense.
According to theArticle 313-1 of the Criminal Code, sentences can range from 375,000 euros fine upto 5 years in prison, excluding aggravating causes (organized gang type).
It is also important to note that in Use cases of forgery, the penalty is 45,000 euros fine and can go up to 3 years of imprisonment (Article 441-1 of the Criminal Code).
As an insurer, you can deploy several tools to effectively fight against document fraud to insurance.
At Finovox, we have implemented a SaaS solution that allowsreview the documents and identify the changes made. How does it work? The solution works thanks to coherence analysis algorithms, visual analysis, statistical and informatics developed by our researchers. After dragging the documents into our solution, they are analyzed one by one to determine if they are original files or if they have been falsified. If they have been modified, Finovox explains how and shows you which zone has been defrauded.
The aim of Finvovox is simple: not to miss out on a falsified document. Whether the document was created from scratch by a fraudster or modified using retouching software, Finovox offers you its complete analysis. With our solution, review all your documents, of all types and in all languages! Interested? Ask for a demo.
To answer your most frequently asked questions, Emeric Desonix, associate lawyer and national leader in the fight against fraud and money laundering for companies and mutual insurance companies, agreed to participate in our interview!
Emeric Desnoux:
This is not a distinction legal, strictly speaking; it was rather born out of practice and derived from the “aggravating” circumstances of the Criminal Code.
Insurance fraud, called simple, involves a litigant (often insured, but not always...) who intentionally deceives his insurance; he then obtains an advantage, often of a financial nature.
On the other hand, aggravated insurance fraud, which generally involves large sum of money (for one or more claims), is made in Organized band, which requires a specific strategy to detect and then manage it.
Moreover, the nature of the response and the determination of the insurer generally vary depending on whether the fraud of which it is a victim is “simple” or “aggravated”.
Emeric Desnoux:
If, as an insurer, you come across an insured who has already been convicted of fraud, the decision is yours. Indeed, several options are available to you:
However, he There is no file listing fraudsters in France, condemned as such by Justice.
At the subscription stage, such detection is therefore very difficult to perform.
Emeric Desnoux:
The Insured Vehicle File (FAV), created in 2016 and made available to law enforcement agencies in 2019, lists the license plates of all vehicles.
It is funded by insurance companies when a motorist is subscribed.
This file is widely used in the fight against auto insurance fraud, which represents a very significant portion (in terms of number of claims) of fraud committed in France.
For this reason, the FAV is a valuable tool that can be used, in particular, The ARGOS.
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