FSA concerns over fraud specialists' competence leads to plan for best practice code
Concerns over the insurance industry fraud investigations has led to the FSA taking action.
The FSA has begun consultations with the industry with a view to drawing up a statement of best practice for carrying out fraud investigations.
It follows the publication last month of FSA Discussion Paper (DP) 26: Developing our policy on fraud and dishonesty, which will canvass views on reducing fraud and dishonesty affecting the financial services industry.
Fraud investigators were scheduled to meet FSA representatives this week to discuss best practice guidelines.
Cotswold Group fraud manager Cath Williams said: "We need to develop a clear and sound principle of best practice.
"Insurers carrying out investigations need to have an auditable process in place. The majority of insurers don't."
Williams added that it was vital that insurers should be carrying out due diligence on the investigation company they use, as well as ensuring that investigations are compliant with human rights and the Data Protection Act.
The scheme includes a free 24-hour telephone service called Fraudline, which will be manned by Cunningham Lindsey technicians and adjusters.
All information is forwarded to the relevant local authority, which will decide how to investigate the case.
Fraudline was developed by Cunningham Lindsey in conjunction with Caerphilly County Borough Council.
The scheme will be rolled out across the UK in 2005.
Alarm, the national forum for risk management in the public sector has welcomed the initiative.