Insurance Association of Malawi has disclosed that fake insurance claims relating to road accidents and injury claims in manufacturing industries cost them K5 billion in 2019 alone.
The association’s president Bywell Chiwoni in an interview yesterday described the scheme as a big issue and complicated, saying conspirators in the syndicate include “ambulance chasers” (people who follow up on accidents), lawyers, medical doctors and some Malawi Police Service officers.
He said initially, the scheme focused on road accidents, but it has now moved to manufacturing industries where some agents are planted to take up recorded personal injuries to some lawyers who file the cases to court, sometimes without the knowledge and instructions of those injured.
Chiwoni said the insurance industry, having gone through the claims’ files, also discovered that even police officers are involved as fake police reports are issued to facilitate the claims.
“Going by the 2019 assessment, it shows us that 25 to 30 percent of claims made to our member companies were bogus, which translates to the loss of K5 billion in that year alone,” he said.
The association has 10 members that include eight insurance companies, one reinsurance firm and one reinsurance broker.
Said Chiwoni: “We have ambulance chasers and what we know is that when an accident occurs, there are bureaus that take details of those injured and pass them on to lawyers, sometimes without the knowledge of those injured.
“Lately, they are doing the same in the manufacturing industry—they have [designated] forms [from Ministry of Labour] which injured employees process to get their compensation. Sometimes when the insurance firms take time to pay, they take the matters to court. It’s their right and we have no problem with that.
“But what we are concerned with as insurance companies is that there are set procedures we follow without necessarily having to take the matters to court. But these procedures are ignored and some lawyers, doctors and police officers opt to take a fraudulent process, sometimes exaggerating the number of people involved or the extent of the injury.”
He said sometimes a claim, whose real cost would be K100 000, goes up to millions, and when default judgements are passed as sometimes the insurance firms are not served with summons, they see sheriffs knocking on the door.
“In a worst-case scenario, we also have our own officers in the insurance industry who are involved in these bogus claims. It’s complicated, we are working hard to get to the bottom of this and put a stop to it,” Chiwoni said.
He disclosed that some manufacturers have formed a task force to investigate the syndicate and the team was working hard to bring evidence.
National Police spokesperson James Kadadzera in an interview yesterday said police would gladly investigate the matter if given specific examples of fake police reports.
He said: “If the evidence of fake police reports is brought to us, we would know who authored them and investigate. We would also be able to investigate the other players being mentioned [lawyers and medical practitioners]. Minus that, it is very difficult to jump on the matter.”
Malawi Law Society (MLS) honorary secretary Martha Kaukonde is also on record as having told The Nation last November that her society could not act on the allegations against its members without any material to support any allegation.
She said MLS would no doubt take appropriate steps against such members if supporting materials were provided.
On the other hand, Society of Medical Doctors president Victor Mithi is also on record as having said if the issue was being raised again by the Ministry of Labour, there was a possibility the malpractice was happening.
Ministry of Labour spokesperson Christina Mkutumula said in November that the ministry had issued a caution against the malpractice but they were concerned that the defrauding of employers and insurance companies was continuing.
The ministry had accused medical personnel and lawyers of their involvement in making unsolicited claims for injuries in the workplace.
Last month, the Anti-Corruption Bureau (ACB) appealed to professional bodies to ensure that their members are discharging their duties ethically and avoid being found on the wrong side of the law.
The ACB call came amid concerns from government that some unauthorised medical personnel continued to issue medical reports for compensation claims by injured workers under the Workers’ Compensation Act of 2000.
ACB principal public relations officer Egrita Ndala, in response to a questionnaire, said the bureau was of the view that the professional bodies were supposed to ensure that their members act professionally.
On the same matter, some quarters have suggested that some of the lawyers concerned take their matters to a particular registry of the High Court of Malawi and specific magistrate’s courts.
Registrar of the Malawi Supreme Court of Appeal and High Court of Malawi Gladys Gondwe said in a response to a questionnaire in December that judge-shopping is unacceptable.
She said: “But we know there are instances where, owing to physical proximity or the quest for expeditious disposal of their matters, parties have registered matters in other registries than where they are otherwise expected to.
“With regard to the claims at hand, I am yet to ascertain if we have any formal communication from the Ministry [of Labour] or any concerned people on record.”
A private investigator, Kingston Lapukeni, who is probing the scheme on behalf of some manufacturing companies, said he needed to get clearance from his clients to officially release the report to us.
But he said his investigations show how some lawyers and their agents conspire to allegedly defraud insurance companies and employers.
Lapukeni once worked for Reserve Bank of Malawi as chief internal auditor, Ministry of Finance as head of budget and monitoring, Malawi Police Service as investigations consultant and Malawi Revenue Authority as director of tax audit and investigations.
He holds a bachelor of social sciences from University of Malawi and is currently a managing director of Blantyre-based Private Investigations Consultancy.
He feared there could be a possibility that some students going back to their communities may unknowingly have Covid-19 and later transmit it to others.
He said: “Government’s idea to keep girls in school and its effort to contain the situation is commendable, if indeed girls will be provided with necessary support.
“However we need to dig deeper on what support is being given to them because we hear that they are not being attended to. Government also needs to look at the interests of students who have not yet tested positive. It also has to look at the mechanisms to ensure that those who have not tested positive should not contract the virus…”
On Friday, some parents expressed concern that students are still being kept in school amid Covid-19 infections at the campus where 137 out of 605 students tested positive.
Mussa highlighted in a statement that government will continue disinfecting learning institutions in a bid to prevent the virus from spreading further.
Since the dawn of the 2021, a new wave of covid-19 has since killed over 111 people, including Cabinet ministers and a PS within a space of one month. On a daily basis, the country is recording over 300 new cases.
President Chakwera has since ordered a temporary closure of schools and has spelled out a number of strict measures that need to be seriously followed until the situation calms down. He declared the country a State of National Disaster.