Uganda Seeks to Emulate SA Insurance

July 6 - The rural settings of KwaZulu-Natal make it extremely difficult for life insurance companies to follow up all claims, says the Association for Savings and Investment South Africa.

The association said that for the second year running, the province has recorded the highest number of false insurance claims, vying only with Gauteng for first place for this dubious title.

Due to the geographic makeup of the area, fraud syndicates are able to operate freely in the still developing market of KwaZulu-Natal, making it practically impossible to keep tabs on all claims.

"Not only is it far more difficult for life insurance companies to verify and investigate claims in rural areas," said the Chief Executive Officer of ASIS, Peter Dempsey, "but funeral and entry level policy sales volumes are also the highest in these provinces, owing to high population levels."

False insurance syndicates work in a two pronged manner. They either submit a fraudulent death claim if the customer has an insurance policy, or they take out a life and/or funeral policy on a certain person and pay out the premiums for the waiting period of the policy. In both cases, all that is needed is a name and identity number.

The syndicates then produce a false death certificate and claim on the person's 'death'.

"Usually these syndicates receive tip offs from state mortuary staff or private funeral parlors - who are on their payroll - when an unidentified or badly mutilated body arrives," said Dempsey.