The authority’s CEO Sammy Makove told journalists that most fraud cases involve State corporations which have the largest membership and beneficiaries using the medical schemes.
There are also cases where dependants have sold their cards raising fees paid by the insurance schemes to hospitals per month.
“Let’s say you have a scheme of a thousand members under M4 – meaning the member and four dependants. Then they are given a medical card by an insurance underwriter. Some of these cards are not smart (electronic); they just have a picture and names. So if I I’m able to get such a picture on my fake card, I will go to any facility and get treated,” Makove said while giving an update of the insurance sector.
The regulator has called on all the insurance companies to invest in electronic cards to enable them secure their members and the whole sector from the growing illegal activity.
“In some of the private hospitals here in Nairobi, it may be hard to defraud because they have gadgets to capture your biometric data. But say a hospital in Machakos where everything is manual, how will they be able to do so?” Makove warned.
IRA in partnership with the Kenya Police Service launched an Insurance Investigation Fraud Unit last year to deal with malpractices in the industry.
In 2012, there were 143 cases reported at the unit involving various fraud cases in the insurance sector where Sh253.6 million was lost.
However only Sh5.2 million have been recovered so far.
The highest theft cases were by the insurance companies’ employees, followed by fraudulent workman compensation claims.
However, the industry’s gross written premiums grew by 21.8 percent to Sh111.8 billion from Sh91.8 billion in 2011.