South Africa where corpses are bought or rented to commit insurance fraud

On Monday, the Association for Savings and Investment South Africa said reports from the forensic departments of life insurers show that the “buying and renting of dead bodies” for the purpose of obtaining fraudulent death certificates is a popular modus operandi .

 

Its statistics show that most life insurance fraud in 2018 related to funeral insurance.

 

1 915 funeral claims worth R176.4m were rejected in 2018 by Life insurers, of which 1 127 were found to involve fraudulent documentation. Another 156 fraudulent claims showed syndicate involvement and in seven cases beneficiaries were found to have caused the death of the policyholder.

 

Donovan Herman, a convenor of the Asisa Claims Standing Committee explained that in South Africa, funeral policies do not require blood tests and medical examinations and are designed to pay out quickly and without hassle when an insured family member dies.

 

“Unfortunately, this makes it tempting for criminals and dishonest individuals to take out funeral cover for people who do not exist with the intention of later submitting claims using death certificates issued for dead bodies ‘rented or bought’ for the purpose of committing fraud,” said Herman.

 

Overall, South African life insurers detected 3 708 fraudulent and dishonest claims to the value of R1.06bn in 2018, according to Asisa. These included fraudulent or “irregular” claims relating to funeral claims, death claims, disability claims, hospital cash plans and retrenchment benefit claims. In 2017, life insurers detected 5 026 fraudulent and dishonest claims worth R1.13bn.