How to stay away from unlicensed “insurers” and avoid insurance fraud

by Stavros Tsihlis – Insurance & Investment Advisor

Insurance fraud has risen in recent years, either by people pretending to be advisors or agents without a proper license. The authorities even recorded a case of a nonexistent insurance company!
According to experts, partly due to the economic situation, there is an increase in all kinds of insurance fraud. These are either recorded as fraudulent claims or cases of unscrupulous scammers who pretend to be insurers.

In the case of scammers, the following methods were used, as unraveled by law enforcement agencies in recent years:

1) The method of unsettled premiums:
Scammers posing as insurers approached mainly elderly people and claiming that a person close to them or a relative owed the premium for their renewal managed to detach large sums of money.

2) Insurance policies
A second method of insurance fraud has to do with fake insurance policies that  individuals had issued.  They then approached a large circle of people offering insurance plans at bargain prices and persuaded them to sign up with the forged contracts. If it sounds too good to be true it probably isn’t!

3) The “foreign” insurance company
Two years ago fraudsters, exploiting the fact the EU allowed insurance companies to operate in all EU member countries without requiring the physical installation of the company in each country, created an “insurance firm” pretending to represent a known Bulgarian insurer.
They managed to set an entire network in Greece with offices in Athens and started to provide cover to hundreds of cars.
After professional associations and insurance companies contacted the authorities, it was proven that the specific Bulgarian insurer had no representation or operation in Greece.

What do you need to know in order to avoid one of the above mentioned methods of insurance fraud:

Who is entitled to exercise the profession of the insurance advisor:
Under the current law introduced by the Bank of Greece, an insurance advisor has to carry a professional qualification by the local Chamber of Commerce. In fact, you have the right to ask for these qualifications and it is now obligatory that the advisor has to present this certificate to anyone who asks for it! Furthermore, he/she should certified by the Bank of Greece. This will ensure that the person has indeed been trained and is qualified to offer insurance solutions.
Anyone practicing without the above requirements is faced with a 60.000 Euro fine plus imprisonment of up to two years.

I have paid my premium, how do I know if I have cover or not?:
Under the relevant legislation introduced last year, anyone wishing to have insurance cover has to pay the premium in time and to carry a copy of the insurance contract. For vehicle insurance in particular, the Hellenic Information Centre (HIC) has launched a website through which everyone can check in real time if their insurance plan is valid.
(www.hic.gr)

Which insurance companies are authorized to operate in Greece:
The insurance firms that are based in Greece or have established a Greek branch are entitled to offer insurance services.
Additionally, any insurance firms which are not based in Greece are also able to offer their services as long as they are registered with the Bank of Greece.
Anyone can visit the Bank of Greece’s website and check whether his/her firm of choice is indeed authorized to operate legally in Greece.

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