The Insurance Regulatory Authority (IRA) has launched a countrywide crackdown on motorists using fake insurance certificates in the wake of rising fraud on motor insurance.
Yesterday, the Insurance Fraud Unit consisting DCI officers seconded to the IRA mounted a crackdown in different parts of Nairobi, an operation that also involved the Association of Kenya Insurers(AKI).
According to AKI, fraud cases have increased since digitisation of the insurance policies payment systems.
Currently, a buyer pays, the cover is effected and they get the certificate on email and print, as opposed to the past where one would physically collect the certificate.
This, AKI says has led to fraudulent deals where some rouge agents and members of the public have been manipulating systems.
“We know there are some Kenyans out there who probably could have paid for the insurance mainly using agents, and end up with fake insurance certificates,”AKI chief executive officer Tom Gichuhi told the Star yesterday.
He said some people have already been arrested, taken to court and are currently out on bond
Most motor insurance fraud is being noted in certificates issued by insurance agents, authorities have said.
“There are unsuspecting Kenyans who have been defrauded by these agents and that is the reason for the crackdown,” Gichuhi said.
A survey by business intelligence company–Bismart, in 2019, indicated nearly 40 per cent of subscribers hold fake car insurances.
The study conducted on 25 insurance companies shows that the problem emanates from the lack of supervision of intermediaries by the insurance holders and the authorities.
Some of the regions with high cases of fraud, according to AKI, include Kitengela, Kisumu and Nairobi.
Some insurance buyers are also said to avoid genuine certificates due to cost, and opt to part with a few thousands for fake stickers.
“With this, you are exposing yourself to hazards including you having to repair your own vehicle, or if you are involved in an accident where someone is injured, you end up paying very high levels of damages which can have you auctioned,” Gichuhi said.
AKI and IRA have lined up a series of public education campaigns to help the public point out fake and genuine insurance stickers, which will help curb the vice.