Canadian Underwriter

CANATICS, IBC taking important step forward in fight against organized insurance crime

March 14, 2016   by Canadian Underwriter

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Canadian National Insurance Crime Services (CANATICS) and Insurance Bureau of Canada (IBC) are joining forces in the war on organized insurance crime, hoping to advance efforts with a mix of timely early warnings and investigation expertise.

CANATICS, IBC team up on combatting insurance fraud

The strategic move to collaborate is expected to improve the property and casualty industry’s ability to identify and investigate criminal fraud rings, notes a statement Monday from CANATICS, a non-profit organization focused on fighting insurance crime by providing the industry with intelligence derived from analytics performed on pooled industry data. CANATICS’s analytics tools are used to identify suspicious claims and facilitate further investigations by individual insurance companies (when suspicious behaviour or patterns suggesting organized criminal activity are identified, an alert is sent to affected insurers).

“As two organizations with an industry-wide view, CANATICS and IBC are uniquely positioned to support the fight against fraudsters who attack multiple insurance companies,” Ben Kosic CEO of CANATICS, suggests in the statement. “CANATICS is the early warning system, producing alerts on suspicious activity; IBC is the investigative body that can confirm whether activity is, indeed, fraudulent, by gathering the evidence that police and prosecutors need to bring the bad guys to justice,” Kosic continues.

“On behalf of insurance companies, the most suspicious alerts are now being sent to IBC, the investigative body for the industry, an important step in fighting crime now and in to the future,” notes the statement, adding that investigations only proceed with the approval of affected insurers.

CANATICS reports that organized insurance fraud reduces road safety and drives up premiums, pointing out that a single staged collision can result in more than $100,000 in fraudulent payouts.

“This partnership with CANATICS will be very important,” suggests Garry Robertson, IBC’s national director of investigative services. “Access to CANATICS alerts should greatly improve the effectiveness of our investigations, thereby bringing the fraudsters to justice sooner and reducing the impact of fraud on honest policyholders,” Robertson says in the statement.

CANATICS cites as just one example of fraud charges laid in connection with an alleged organized fraud scheme involving legal and health care professionals in Toronto.

Aviva Canada reported in a statement Saturday that the Toronto Police Service has laid five charges against a chiropractor, paralegal and clinic employee following “an investigation into alleged fraudulent auto insurance injury claims made via Toronto legal and health professionals.”

The insurer reports that in 2014, “an Aviva Canada customer who stepped forward after allegedly facing pressure to lie about accident injuries prompted the investigation.” Aviva Canada subsequently provided Toronto police with video and other supporting evidence that led to the charges, the company statement adds.

It is alleged that video footage obtained by Aviva Canada shows a chiropractor and clinic employee from Wellness Centres of Ontario explaining to two undercover investigators how they can work together to obtain insurance payouts, despite both investigators stating that they are not hurt.

The footage is also said to show a paralegal from nearby Kovtman Law explaining in great detail, how both the paralegal and investigator can illegally obtain insurance payouts.

Aviva Canada reports the licensed chiropractor and the clinic employee have both been charged with three counts of fraud under $5,000 (one for each undercover investigator and one for the insured customer), while the paralegal faces two counts of fraud under $5,000 (one for each undercover investigator) and possession of property obtained by crime under $5,000. All three accused are scheduled to appear in Court on Mar. 17.

None of the allegations have been proven in court.

“The investigator was told he would get a $10,000 insurance settlement in approximately one year; $3,000 to be retained by the law office and $7,000 for the investigator,” Aviva Canada notes in its statement.

“Fraud costs honest insurance customers approximately $130 per year in Ontario and we continue to make every effort to stop it,” emphasizes Aviva Canada president and CEO Greg Somerville.

Following the charges, the insurer made formal complaints to the Financial Services Commission of Ontario, the College of Chiropractors of Ontario and the Law Society of Upper Canada.

“Consumers need to know that we have an over $1 billion fraud insurance problem in Ontario. We are hopeful that this typical example will raise public awareness that this hurts everyone, and encourage consumers to speak up when they see fraudulent activity,” Somerville adds.