Golden Sibanda Senior Business Reporter
The Insurance and Pension Commission is working with the insurance firms to put tamper proof features on cover notes to deter fraud. This comes as a significant number of people have lost money and assets believing they were insured, yet they would have been issued with fake cover notes. According to IPEC most victims of insurance fraud in Zimbabwe only realise that have been duped upon making a claim against an “insured risk”.
Short term insurance service provider Nicoz Diamond chief executive Grace Muradzikwa recently said insurance policy fraud had scaled new heights and industry, together with IPEC, would leave no stone unturned in eliminating the vice.
As such, industry is working with the Zimbabwe National Road Authority and Central Vehicle Registry to close loopholes on the sale of fake cover notes. The system to be used should be in place by end of this year.
IPEC head of prudential supervision, Pupurayi Togarepi, said the problem of insurance fraud is growing although the value has not been quantified.
“We are yet to quantify the prejudice to the insuring public, but judging from the complaints we receive it may be substantial,” he said.
As such, the process is underway to introduce more foolproof security to guard against the growing problem of insurance fraud in the country.
“We are working together with industry to ensure there is enough security on cover notes, so that customers can easily identify fake from authentic.
“We have also engaged the police; touts going around the post offices and ZINARA selling fake cover notes will be arrested,” Mr Togarepi said.
The process forms part of extensive measures IPEC is pursuing to stem out fraud including engaging police to flush out the fraud from where they operate.
Mr Togarepi said the insuring public should buy insurance cover from registered companies, brokers or agencies by verifying first with IPEC.
“Nobody is allowed to trade or transact insurance business without being duly registered to transact,” the prudential supervisor said yesterday.
“The public should also be wary of supposedly cheap policies since buying such may be too expensive at the point of making a claim when such a claim is repudiated.
“It should also avoid buying policies from touts of no fixed aboard. The public is free to check with IPEC on the authenticity of an insurer.”
Mr Togarepi said IPC will take prompt response to any reports of insurance fraud brought to the regulator to wipe out the cancer of fraud. He said that together with insurance industry, IPEC is educating prospective buyers of insurance policy on how to buy authentic policies.