Essay - Insurance Fraud Abstract: After Tax Evasion, Insurance Fraud is Considered...

Insurance Fraud

Abstract:

After tax evasion, insurance fraud is considered the highest-ranked among white-collar crimes. The original concept of insurance, as a for-profit endeavor, was to collect funds from a l*****rge number of people to pay for damages and accidents that involved a small percentage of the population that paid premiums. Insurance fraud is an ever-growing problem. Solving or eliminating th***** problem requires the resources and knowledge ***** individuals or associations with expertise ranging from not only *****, but also law enf*****cement, legal issues ***** the social sciences. ***** concept of insurance fraud, both, by an individual and a corporation, has become so pervasive in today's society that ***** general ***** has learned to *****lerate and condone these crimes.

Various organizations, funded by state ***** federal governments, and supported by the ***** company, are trying to increase the aw*****ness of this problem among the general population. Annually, an average Americ***** family spends approximately, an additional $1000 in premiums for home, health ***** auto insurance because of fraudulent claims.

In addition to ***** individual, governments, employers and local businesses ***** pay the price in higher ***** for goods ***** services provided. Many ***** companies often are faced ***** insolvency due to this high business cost.

Introduction:

***** is ***** an investment where one cannot expect to get *****'s money back at the end of the term or period; nor is it a gamble with resources. Insurance offers protection against risks ***** already exist. Risks are events or incidents th***** can cause extensive loss and damage to bo***** life and property. It is essentially a risk-sharing scheme. Insurance ***** *****ed in various *****ms f***** thous*****s of years. In ancient times, the Ba*****lonian laws as part of Hammurabi's Code were a form ***** insur*****nce-practice observed among the citizens of ***** land.

Fraud in the insurance industry h***** existed ever since insurance (as we know it today) as a concept was first introduced in the seventeenth century. ***** fraud occurs when ***** deceive an ***** comp*****y or agent to collect ***** to which they ***** not ent*****led, as per terms ***** the insurer-insured agreement. Strictly defined, insurance fraud is: "***** intentional misrepresentation of material facts and circumstances to an insurance company to obtain payment that would not otherwise be made."

The purpose of this thesis is to identify the different types of ***** fraud perpetrated today, ***** to evaluate their effect on the insurance industry and society at large. Evalu*****i***** ***** the preventive measures that can be taken ***** help prevent and reduce ***** number of fraudulent claims will also be d*****cussed. The effect ***** fraud on *****th individuals as *****ll ***** ***** in quantifiable and unquantifiable ways has a tremendous b*****cklash on the individual, ***** consequently, on society.

History of *****surance:

One of ***** most famous ***** providers in the world *****, Lloyd's of London came ********** existence in 1688. Edward Lloyd owned a coffeehouse in London where merchants and bankers evaluated the risk of ***** maritime operations ***** seafaring vessels used for