PINS S6.8 What is fraud risk?

(1) Fraud risk means:
(a) risk from unauthorised activities such as those that breach the controls, procedures, limits or other restrictions in an insurer's policies and procedures and in legal and regulatory requirements; or
(b) risk associated with:
(i) a deceptive act or omission intended to gain advantage for the party committing the fraud or other parties; or
(ii) an intentional act undertaken for personal gain or to tamper with or manipulate the financial or operational aspects of the business.
(2) Fraud risk exposes an insurer to financial losses if not managed properly.
(3) Fraud risk can result from:
(a) internal sources (such as redirection of premiums); and
(b) external sources (such as fictitious claims).
(4) Countering fraud is the concern of individual insurers and intermediaries who need to understand, and minimise their vulnerability to, fraud
Inserted by QFCRA RM/2013-1 (as from 1st January 2015).