Islamabad: The Pakistan Economy Watch (PEW) on Thursday said that some politicians have started filing false claims for financial profit.
The insurance industry has a defence mechanism against false or exaggerated claims, but it becomes difficult when policy holder is an influential politician, it said.
Such practices and highly illegal but very common in the insurance industry due to weak control, said Abdullah Tariq, SVP PEW.
Talking to representatives of insurance industry, he said that some greedy politicians have targeted corporate sector after robbing nation of all their belongings.
He said that one such example is that if Asif Tauseef, the State Minister for Privatization who has earned around 200 million through fake claims in the last five years.
The PML-Q leader is now pressing some insurance companies to approve claims against damages that never occurred, he added.
Tariq said that favourite modus operandi of the minister is to deliberately set part of the stock in factory on fire to make false claims. Recently he set on fire littler in Faisalabad and initiated a claim for losses incurred to wheat stock.
He would look very calm after every incident in which he claims to have lost millions.
The local administration, fire department and his party would always support his moves while the officials of the insurance companies would get threats to approve claim immediately, he informed.
After getting blacklisted from many companies, Mr Tauseef continued plunder through getting businesses insured in the name of his relatives.
Few black sheep from insurance industry and banks are also involved in this game and one of the regional chief of a nationalised bank is currently facing inquiry after being suspended while PML-Q is trying to get his cleared as soon as possible, the PEW official said.
He said that SECP or insurance companies have never tried to establish a database of all customers to identify habitual offenders. The mechanism to deter such activities must be improved and empowered.
As long as insurance industry relies on passing of information from person to person by oral communication, the tendency of fraudulently obtaining benefit to which a person is not entitled will continue, he said.
Fraudulent activities also affect the lives of innocent as these crimes cause insurance premiums to be higher. Insurance industry can only thrive if insurance frauds remain below 10 per cent of the all loss adjustment expenses.
The trend of blackmailing insurance companies will weaken this sector, reduce investments and trigger flight of capital, he warned.
Election Commission and the CJP should take note of the plunder of public funds, he demanded.
For more information, contact:
Dr. Murtaza Mughal
Pakistan Economy Watch
402, 4th Floor, Gulistan Khan House, Fazal-e-Haq Road,
82-East, Blue Area, Islamabad
Tel: +9251 251 0375
Fax: +9251 280 2449
Cell: +92321 515 7671