Tuesday 12 December 2017

Insurers in talks to pay gardai to probe fraudsters

Specialist Garda unit could cost companies €1m a year

Minister for Justice: Frances Fitzgerald Picture: Tom Burke
Minister for Justice: Frances Fitzgerald Picture: Tom Burke
Maeve Sheehan

Maeve Sheehan

Insurance companies are in talks with An Garda Siochana about setting up a dedicated specialist unit funded by the industry to investigate insurance fraud.

A "number" of meetings are said to have taken place between the Garda's economic crime unit and Insurance Ireland to discuss establishing a counter fraud unit modelled on the UK's industry-funded Insurance Fraud Enforcement Department at the City of London Police.

The insurers body, Insurance Ireland confirmed the "exploratory talks" are under way on setting up a similar fraud department within An Garda Siochana but said they are at "a conceptual stage".

In the UK,  insurers have committed €11m over three years to fund the 38-strong unit.

Security sources estimated that Irish insurers are looking at a cost of around €800,000 to €1m a year to staff a department of 10 gardai, plus additional running costs. While insurers would refer suspected claims to the proposed unit, gardai would run the investigations and the unit with "total autonomy", the source said.

It is understood that Insurance Ireland submitted the proposals to An Garda Siochana, which agreed to open exploratory discussions.

The prospect of private companies funding criminal Garda investigations would be an unprecedented departure for the force and one that could prove controversial. 

Sources said the move would be "groundbreaking" for An Garda Siochana, which currently only charges private companies for policing public events such as concerts and sports events. Private companies paid more than €13m over three years for policing cup finals, stadium concerts and community events, according to figures released by the Minister for Justice, Frances Fitzgerald last year.

The talks are taking place against a backdrop of rising insurance fraud, with organised rings behind "crash for cash" staged motor accidents that can result in multiple payouts. 

Axa and Aviva both say they are currently investigating organised insurance rings operating in several counties. There were reports last week that motor insurance fraudsters are travelling here from the UK to stage crashes to avail of the compensation awards.

The Department of Finance, which set up a working group on bringing down insurance costs chaired by the Minister of State Eoghan Murphy, is aware of the talks.  

A statement from Insurance Ireland said it has "held exploratory talks with An Garda Siochana with regard to the possibility of establishing an Insurance Fraud Investigation Group within An Garda Siochana.

"This would be along similar lines to the UK's IFED, albeit on a smaller scale. The proposal is at a conceptual stage at present and is the subject of ongoing discussions. Such an Investigation Group would need to be accompanied by solutions to the problems around the sharing of information between insurers and around securing prosecutions and convictions."

A statement from the Department of Finance said the working group is "examining" counter fraud models in other jurisdictions and "through one of its sub-groups, has also met with the Garda National Economic Crime Bureau, a specialist bureau that investigates fraud-related crime involving complex issues of criminal law or procedure."

Organised insurance fraud is one of a number of factors blamed by insurers for the spike in insurance premiums, which have gone up by 66 per cent since 2011 and 25 per cent more in the year to September.  Insurers say fraud costs about €200m a year and adds €50 to individual policies.

Insurers also claim the high level of personal injury awards in Ireland and legal fees  have a direct impact on rising premiums. 

However a hard hitting Oireachtas Committee report last week accused insurers of lacking transparency, which made it impossible to get to the root cause of the increase in premiums.

The government's working group aimed at reducing spiralling insurance costs published 40 recommendations last weekend. As well as tackling fraud, they included setting up a new personal injury commission, and proposals for data sharing between insurers. Its report will be published in December.

The UK's Insurance Fraud Enforcement Department based at the City of London Police is funded by the Association of British Insurers, which committed €11m over three years. It investigates everything from domestic and commercial insurance fraud to "crash for cash" accidents staged by organised gangs.

Sunday Independent

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