BY DAVID MUSYOKA
NAIROBI, Dec. 22 (Xinhua) – The Kenya Police Anti-Fraud Insurance Unit has completed training becoming the fourth such police anti-fraud unit for Kenya’ s financial services sector that is seeking to reduce incidents of fraud. The Commissioner of Police Mathew Iteere announced in Nairobi on Thursday that the unit comprises of 20 officers who have been undergoing training in insurance matters.
“Incidents of insurance fraud have increased and we hope the new unit will become useful to the industry,” Iteere told journalists in Nairobi. Association of Kenya Insurers (AKI) estimates that about 40 percent of all insurance claims paid out are fraudulent. The industry estimates show that fraud in the medical insurance sector caused revenue losses estimated at 45 percent of total claims lodged in 2009. As a result, players kept the costs of the medical insurance policies higher to cover for the losses, locking out people who could not afford to pay the higher premiums. A similar fate has befallen the motor vehicle insurance business, where premiums have been capped at a maximum of 7.5 percent of the value of the vehicle from the previous 4 percent.
“The insurance industry is very receptive of the new anti-fraud unit,” said Insurance Regulatory Authority (IRA) CEO Sammy Makove. He said nine officers from the unit have already started working. The unit will be based at the IRA head offices in Nairobi. “The officers who are proficient in matters pertaining to insurance have expressed their willingness to weed out fraudsters from the industry,” said Makove. Makove said IRA will increase its budget for training police officers in 2012 on insurance and fraud detection.
IRA and the Kenya Police said they are cooperating to ensure that every police station in the country has at least two police officers who are trained in insurance matters. Iteere said the training on insurance for police officers will come in handy when the force is converted to Kenya Police Service at the completion of the ongoing reforms.
“The police reforms are envisaged to challenge police officers to know more than the policing aspects and this training come in handy as it gives that extra knowledge and skills required. It also helps to redefine the role of police officers, another aspect of the proposed reforms,” Iteere said. The unit will help reduce the amount of money insurance companies have been spending to hire private investigators to establish the authenticity of claims filed. Some insurance companies had been forced to maintain in-house investigative departments as claims suspected to be fraudulent in motor and medical insurance businesses increased.
The establishment of the unit was proposed by the industry during deliberations on the proposed amendments contained in the Draft Insurance Bill 2011. The unit now joins other anti-fraud units attached to the Kenya Revenue Authority, the Central Bank of Kenya and the Capital Markets Authority. The Police Commissioner announced another such unit, to be attached to the Ministry of Lands is undergoing training and will start operations in late January. (Xinhua)
