Crackdown on insurance fraud crimes yields result

A seven-month joint crackdown on insurance fraud, involving both police and financial regulatory bodies, addressed major crimes of public concerns, stabilizing the insurance market, officials said at a news conference on Friday.

From April to November last year, over 1,400 insurance fraud crime cases, amounting to more than 1.5 billion yuan ($205 million), were resolved, and more than 300 criminal gangs involved in insurance fraud were dismantled, according to Hua Liebin, head of the economic crime investigation bureau of the Ministry of Public Security.

The special operation was launched by the ministry and the National Financial Regulatory Administration in late April last year, aiming to tackle growing concerns from public and insurance agencies over rising fraud activities.

Li Youxiang, head of the administration's investigation bureau, revealed that financial regulatory bodies at various levels provided over 12,000 clues to the police during the operation.

"Police departments organized over 40 collaborative crackdown activities during this period," said Hua. "The joint crackdown has helped clean up the insurance market and maintain financial order."

Fraudulent activities involving car insurance and personal accident insurance remain prominent. "Fraudsters staged fake crash accidents, and some even resorted to illegal tactics, such as intentionally causing injuries, to secure large accident insurance payouts," he said.

One high-profile case in Shandong province involved a suspect surnamed Hou who, in collaboration with others, purchased personal accident and health insurance from 82 insurance companies online and intentionally created over 20 accidents from 2021 to 2023. Hou fraudulently obtained more than 200 insurance payouts, totaling over 2 million yuan, through repeated claims. In October 2024, this insurance fraud was discovered by police, and the suspect, Hou, has been detained for allegedly using the insurance to defraud.

Lyu Weidong, head of the economic crime investigation team of Shandong provincial public security department, explained, "Hou's gang focused on personal accident and health insurance, which offer numerous small compensation with a simple qualification process. The suspects exploited these characteristics to commit fraud."

Hua also highlighted that fraudulent tactics are rapidly evolving, with new forms of insurance fraud emerging. "Fraudulent activities are no longer confined to traditional insurance types; they have expanded to include employer's liability insurance, group accident insurance and shipping insurance," he noted.

In one example from April 2024, an investigation by Hefei's public security bureau in Anhui province uncovered a fraud case involving employer's liability insurance led by a suspect surnamed Lu.

Lu's gang attracted several enterprises with high-risk work types to insure with low premiums and in turn purchased employer's liability insurance on behalf of these enterprises from insurance companies.

When employees from these enterprises got injured, the gang fraudulently claimed compensation of a total amount of 30 million yuan from insurance companies by forging compensation agreements and receipts, exaggerating losses, or submitting duplicated claims. Lu and the main suspects in the case were arrested.

Hua also stressed that fraudsters often infiltrate the industry under various guises, frequently collaborating with insiders to commit organized crimes.

He warned about the risk of concealed fraud within companies lacking genuine insurance business qualification, which usually lure customers into purchasing their counterfeit insurance products in sectors such as transport, agriculture, livestock, fishery and renewable energy.

Li Youxiang, from the financial regulatory administration, emphasized that insurance agencies should prioritize consumer rights in their anti-fraud work in accordance with the rules against insurance fraud issued in August last year.

"The administration will integrate anti-fraud measures into the design of insurance products and other parts of the industry chain, reducing the reliance on post-claim checks," he added.

The police urged the public to be more vigilant against fraud schemes, use official channels when purchasing insurance, protect personal information and ensure their rights are safeguarded under the law by rejecting illegal agents.