Romania must have a proactive approach regarding "claims farmers"

20 May 2015 —
Romania must have a proactive approach regarding
Anthony_MADDEN_fiar2015Romania must anticipate the risk and avoid the UK 'claims epidemic' generated by the so called "claims farmers" (or "ambulance chasers"), Anthony MADDEN, Legal Manager, InterEurope UK explained.

He analyzed the situation in the United Kingdom, where the bodily injuries segment was strongly affected by "claims farmers" before 2013, and offered a series of recommendations for the Romanian insurance specialists in order to avoid a similar situation.

"According to the Collins English Dictionary, a claims farmer is a middle man who encourages people to make compensation claims against insurance companies and then proceeds to sell these claims on to a lawyer", MADDEN explained at the Motor Insurance Conference which took place on Wednesday, May 20, at FIAR 2015.

"In the United Kingdom, individual claim details would be sold for up to GBP 1000, prior to the Jackson Reforms in 2013", he pointed out, underlining the fact that in this context, the "claim management companies actively hunted for potential cases against insurance companies, resulting in a risk of fraudulent and exaggerated claims".

The practice is now banned in the UK, due to the Jackson Reforms launched in 2013. However, "the risk is that such practices will be exported and replicated in other countries, including Romania", the representative of InterEurope UK explained.

The solutions for Romania include the following steps that the insurance specialists must take:

Solutions for Romania: 
  • Aggressively defend suspicious claims;
  • Lobby government for legislation (ban referral fees);
  • Develop effective fraud databases and share fraud data;
  • Work with strong partners and regulatory bodies;
  • Defeat a claims culture by being proactive and not reactive.

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