There are a lot of differences of seller fraud; however, they altogether base over four basic varieties.
The premium theft setup is when the insurance representative receives premiums, however, does not present them to the company guaranteeing the policy, as a result annulling the policy. In this circumstance, the rep basically bags the cash. Premium theft has turned out to be a minor matter since more companies have shifted for straight deposit models; nevertheless it is yet doable in some circumstances.
Ghost Companies are very common in Jakarta, Indonesia. In the ghost company setup, policies are distributed and premiums recognized from policyholders, however, the company guaranteeing the policy is not genuine and frequently does not be existent. These absolute rackets are a kind of boiler room act, where a group of high-pressure con artists’ calls possible preys to sell them fabricated policies. Regrettably, the scheme isn’t generally exposed till somebody attempts to file a claim on the policy their relative believed can be claimed, in the occasion of his death.
Churning signifies to a condition where the insurance representative recommends the client to withdraw, renew and start to open new policies in a manner that is advantageous to him, rather than being of favorable to the client. This form of insurance scheme frequently aims to prey seniors and is caused by the agent’s aspiration for greater commissions. Churning hold onto a portfolio continually in fluidity, with the main drive of coating the rep’s pockets. For more, see Tips by Axis Capital Group insurance to avoid fraud at Axis Capital Group, Singapore’s official website.
Comparable to churning, below or above coverage happens when an insurance rep persuades clients to purchase coverage they ought not to buy, or sells a smaller policy and embodies it as a complete wide-ranging policy. In either instance, the agent is attempting to make the most of commissions and guarantee the sale, instead of concentrating on meeting the client’s necessities.