Conducting a potential fraud investigation of a company’s own insured is a sensitive task. It can be further complicated by not taking into account an insured’s cultural background, which in some cases can make conduct look suspicious even when it’s not. On the other hand, cultural practices may also provide clues about actual improper conduct.
Making missteps either way, whether in a recorded statement or an examination under oath, could lead to a wrong answer regarding whether fraud is being committed, and could expose the insurer to extra-contractual liability due to being perceived as treating the policyholder insensitively and improperly. These considerations are important as an adjuster, investigator, or attorney determines how to obtain information effectively without being inadvertently offensive to an insured’s culture, and how to evaluate the information obtained during the investigation.
Understanding the Claimant
It is important to understand who is presenting the claim. Questions regarding how the loss occurred and whether the insured owned the claimed lost, stolen, or damaged property should be considered in the context of the insured’s background and circumstances. Among the factors to consider are the policyholder’s family, culture, current and past financial situation, as well as typical patterns and practices. Is the insured’s acquiring of the claimed property consistent with these factors? Is there anything in the claim’s facts and circumstances that is inconsistent with normal patterns and practices? Is there anything in the person’s cultural background that would make the property acquisition, or the circumstances of the loss, understandable when, in other contexts, it might be suspicious? These factors should be asked about, investigated, and considered in the context of conducting an SIU investigation.
For example, Armenian culture has a tradition of giving expensive gifts for weddings, including jewelry, fabrics, household goods, and money.
In Indian culture, weddings traditionally last for multiple days and include a variety of ceremonies. In one ceremony, the couple being married exchange gold rings. The groom’s parents present the bride with a basket of gifts. Clothing in traditional Indian weddings is elaborate. Among the traditional items that a bride wears is jewelry, including a giant jewel that the bride wears on her forehead and in her hair. The groom and guests may wear traditional clothing. Since the weddings can last three days, it often requires a number of clothing changes.
In Chinese and Japanese cultures, traditional clothing, typically expensive, is worn. Chinese brides wear an embroidered, burgundy red satin wedding dress, as well as additional gowns throughout the ceremony. Japanese newlyweds may wear traditional kimonos.
A traditional Uzbek wedding dress includes a long dressing gown and pants made from khan atlas, the most prized of Central Asian silk textiles. The bride also wears a long overcoat and embroidered coverlet, while a golden cap or crown and a long veil made from handmade lace is worn on the head.
Everything is exquisitely embroidered with silk and gold thread that is woven into floral patterns. The groom typically wears a chapan coat embellished with intricate gold thread and an embroidered skullcap.
In Latin American cultures, 15-year-old girls have a quinceañera party, in which they wear a formal gown. Wedding ceremonies may include the groom giving the bride gold coins in an ornate box or chest.
It Tibetan culture, a khata, which is a traditional ceremonial silk scarf, is given as a gift for major milestones such as births, funerals, weddings, and graduations.
There are a number of other cultures where wedding gifts involve jewelry or precious stones, where wedding clothes are expensive, and where expensive dowries are given. Understanding which items a policyholder might have received, or acquired to give as gifts—even if seemingly inconsistent with their financial situation—might require knowledge of their cultural or ethnic background.
Role of a Claim’s Context
A claim’s context also plays a significant role in evaluating potential fraud. For example, a claimant may have a good present income, but questioning may reveal that the situation is about to change. Is the insured under an employment contract that provides a good income, but is about to expire? One situation is where the insured sold a business and remained as a well-paid employee or consultant for a set number of years. If that period will expire soon, what is the insured’s plan after the income stream expires? The expected loss of income could provide a financial motive that might not be readily apparent by looking only at the past and present.
An insured may provide information about his assets to show that he is substantial enough to eliminate financial motive from the equation. Looking at static financial information will provide an incomplete picture, though. How are the assets trending? If the insured has $500,000 in the bank, that may indicate that the $100,000 claim is not the result of needing the money. But, if a year ago there was $1 million in liquid assets, and two years ago there was $1.5 million, that may tell a different story.
Asking the Right Questions
Obtaining information without causing unnecessary offense can be tricky. An adjuster, investigator, or attorney does not want to be accused of asking questions that are unrelated to the claims investigation. They do not want to create a perception that the claim decision is based on the insured’s race or ethnicity. But they also want to be aware of facts that might make it more likely that the claimant possessed the claimed items before the loss as a way to establish that the claim is valid.
Asking basic questions regarding when and why the items were acquired should lead to answers regarding if they were received as gifts, or acquired in order to give them as gifts. Being aware of that possibility will lead the questioner to be prepared to ask follow-up questions on those subjects. It also can lead to requests for wedding photos that may show some of the claimed items. Asking about the traditions in open-ended questions should help the investigator gather the necessary information without causing offense. Because weddings are common events that lead to giving, receiving, or wearing expensive items, finding out about all such events that occurred around the time of the claimed loss could give rise to significant information.
Viewing claimants’ social media accounts could also lead to information regarding their ethnic or cultural backgrounds or recent/upcoming significant events. Based on this information, research can be done before questioning to determine what to ask on the subject.
A claimant’s ethnic and cultural background, like many subjects that should be covered during an SIU investigation, risks offending the insured. But failing to look into this area could lead to not discovering, or understanding, information that can support a claim.