INSURANCE FRAUD: THE CASE IN TURKEY

Abstract

Insurance frauds deeply affect insurance companies, policyholders, and the insurance industry as a whole. The cost of fraudulent damage affects the profitability of companies, and has negative effects on the society in terms of moral values. Increases in insurance costs can lead to increases in the premiums paid by policyholders, each family, and, ultimately, all of the insured. Recently, new legal regulations related to this issue have been performed in Turkey and higher institutions have been created. A regulation issued by the Under-secretariat of the Treasury, on June 1, 2011, defines insurance fraud as aggravated fraud. Insurance fraud in Turkey usually takes the form of intentional misrepresentations of facts to the insurance company to get the company to pay for something not actually covered by the policy. Studies examined the insurance industry in terms of the concept of financial crime, and inclusion of the concept of financial crime in insurance regulations was proposed since financial crimes have an important place in the current problems of the industry. In addition, it is seen that insurance frauds have changed over time as a result of studies.