IS SPECIAL INSURANCE FRAUD UNIT SCRAPPED BEFORE IT STARTED?
Anger after Government abandons its plan
MINISTERS have abandoned plans for a crack Garda fraud unit to nail motor insurance cheats who cost us €90million every year. Even though the Government’s own Cost of Insurance Working Group admitted that prosecution of the cheats is ‘very low’, Junior Finance Minister Michael D’Arcy said such a squad is ‘unlikely’. Mr D’Arcy told the Irish Daily Mail that Garda Commissioner Drew Harris is against the unit because it would be funded by the insurance industry and not the taxpayer.
While there is increasing public concern over the low level of motor fraud prosecutions, with one
recent poll showing that 95% of those surveyed want tough measures against the fraudsters, the minister said the existing Garda fraud squad – the National Economic Fraud Bureau – will continue to try to tackle the huge car insurance fraud problem.
However, Robert Smyth, who is Investigations and Fraud Manager at Aviva insurance, has warned that the gardaí are simply too underresourced to cover the spiralling cost of such investigations.
And as long ago as January last year, the Government’s Working Group, called for such a unit.
Meanwhile, the body that represents insurers, Insurance Ireland,
‘Fraudsters have nothing to lose’
worked with the Government to see if insurance companies and the gardaí could cooperate and a spokesman said that the model used in London had ‘proved to be very successful’.
Minister D’Arcy said: ‘What we have to finalise is a structure that the Garda Síochána is satisfied with how fraud insurance is managed within the National Economic Fraud Bureau itself. ‘That is a matter for discussion. ‘It is unlikely that there will be a separate Insurance Fraud Investigations Unit.’
Mr Smyth of Aviva told how the gardaí do not have the resources to prosecute fraudsters because a case is first brought by the insurance firm to establish the fraud. This may then be appealed and only then, some years later, would the gardaí get involved.
He said ‘The court case could be four or five years after the incident. It is that late in the day that gardaí get involved.’
He said that when a judge decides it is a fraud claim and awards the case to the company, ‘the claimant’s only concern is whether to appeal or not because there is no follow-through from the police’.
‘The claimant is legally entitled to appeal and that puts a stall on any investigation,’ he said. ‘You can put the whole case up in the High Court again and costs build up and the plaintiff loses nothing. There needs to be some consequence. There are very few prosecutions. Something has to give. People will appeal cases because they have nothing to lose.’
Insurers had agreed to fund the specialist taskforce in January of last year after the Working Group published its report.
The unit would have followed the UK’s approach of having a dedicated task force funded by the insurers themselves. But Mr D’Arcy told Morning Ireland yesterday that Garda Commissioner Harris would not allow any Garda unit be funded by industry.
However, Aviva spokesman Peter Boland told Miriam O’Callaghan, on RTÉ Radio yesterday: ‘The Government response to this has been incredibly frustrating. It is Government policy to set up this unit, and the whole squabble about funding is a sideshow, a distraction, because the reality is there is €17million sitting in the accounts of the Personal Injuries Assessment Board, a Government body. That money came from policy holders who had to defend cases and the Exchequer are about to get hold of it.
‘That money would fund the Garda unit so there is absolutely no need for any debate on this. It could happen tomorrow if the political will was there.’
Motor insurance fraud costs as much as €90million a year, adding €50 to the cost of every motorist’s policy, according to Allianz.
And a survey by Liberty Insurance last September revealed that there is 95% support for tough measures against fraud, while 76% of those surveyed believe the cheats are motivated by the belief that they will never be caught.
A spokesman for Insurance Ireland said: ‘Insurance Ireland considered a proposal for a dedicated insurance fraud unit in An Garda Síochána to be modelled on the Insurance Fraud Enforcement Department (IFED) operated by the City of London Police. IFED has full operational independence and has proved to be a very successful model for deterring and detecting insurance fraud. Insurance Ireland was disappointed to hear that this offer will not be taken up as insurers believe it would assist in tackling insurance fraud.’ Calling for a dedicated unit last year the Cost of Insurance Working Group report stated: ‘A second recommendation centred on fraud in the Motor Report is to explore further cooperation between the insurance industry and An Garda Síochána in relation to insurance fraud investigation. An Garda are leading on the implementation of this recommendation with consideration being given to the feasibility of a specialised and dedicated insurance fraud unit within An Garda Síochána, which would be funded by industry.’
Mr Smyth of Aviva said last night that his firm had ‘a Plan B’. He said: ‘We have the largest number of investigators, at more than 30, and we will increase those units and continue to report fraudulent claims to the gardaí.’
€17m already there to fund unit
THAT the Government has decided to abandon its plans for a specialist unit within the Garda, aimed at dealing specifically with the scourge that is motor insurance fraud, is extremely bad news.
When mooted last year, Junior Minister Michael D’Arcy was undoubtedly somewhat lukewarm on the issue, declaring himself uncomfortable with such a set-up.
Still, the expectation was that this muchneeded venture, despite some opposition from the gardaí themselves, had every possibility of getting the green light, such is the extent of the problem caused by insurance fraud in this country.
With proposals that funding for such a specialist unit would be provided by the insurance sector, it is understandable that gardaí might feel ill at ease about operating within what would essentially be a privately funded unit. Nonetheless, the gardaí are under-resourced in this area so surely it makes sense for them and the insurance companies, who are like-minded on this issue, to pool their expertise. There is, after all, no conflict of interest here, simply a common desire to clamp down on insurance fraud and to bring the perpetrators to justice, for everyone’s sake.
Now, it appears this will not happen and the Garda Economic Crime Bureau (the fraud squad) – which deals with cheats in all their guises, and is not, therefore, targeted towards motor insurance – is to continue tackling these insurance cheats.
It is difficult to see why the sensible and well-meaning proposal for an insurance-funded Garda unit has been stalled. It is a system that has already been seen to bear fruit in Britain, where the Insurance Fraud Enforcement Department has been established since 2012.
Funded by the Association of British Insurers and by Lloyds of London, it is a collaborative and, most crucially, an effective unit that is entirely focused on tackling insurance fraud and stamping out such criminality. It is a system that works well in Britain. It should be given the chance to operate here too.