IAI SP6 key terms

A deliberate act of deception intended to obtain a financial or personal advantage, or to cause loss to another, usually through misrepresentation, concealment or abuse of trust.

The mental element requiring that the person knew their conduct was dishonest by ordinary standards of reasonable and honest people, assessed subjectively as to knowledge and objectively as to standards.

The purposeful state of mind behind a fraudulent act; the person meant to deceive or gain advantage, distinguishing deliberate fraud from error, oversight or misunderstanding.

A model describing three conditions that drive occupational fraud: pressure or incentive, opportunity created by weak controls, and rationalisation allowing the person to justify the act to themselves.

The circumstance, often a control weakness or excessive access, that allows a person to commit and conceal fraud without detection; reducing opportunity is the primary aim of fraud controls.

A false statement of fact made knowingly, recklessly or without belief in its truth, which induces another party to enter a contract or act to their detriment.

Deliberate failure to reveal material information that the proposer or claimant is obliged to disclose, such as prior claims, convictions or declined cover.

Information that would influence a prudent insurer's decision on whether to accept a risk, on what terms, or on the premium charged; failure to disclose it may allow the insurer to avoid the contract.

The proposer's obligation to reveal material facts to the insurer before cover begins, and to avoid misrepresentation, so the insurer can assess the risk fairly.

The principle that both insurer and insured must act honestly and openly in their dealings, underpinning disclosure obligations and the fair handling of claims.

The increased likelihood of loss or exaggerated claim arising from the insured's own conduct or attitude, such as carelessness, financial distress or a history of suspicious claims.

Fraud committed by otherwise ordinary people when an easy chance arises, for example inflating a genuine claim or adding items to a genuine loss.

Planned fraud involving two or more people or networks, often using stolen identities, staged incidents or complicit professionals, and typically repeated across multiple victims or policies.

A deliberately manufactured loss event, such as a fabricated burglary, arranged collision or contrived slip, created so a claim can be presented as if genuine.

A genuine loss where the claimant inflates the amount, adds items not lost, or overstates damage in order to recover more than is properly due.

A claim presented for a loss that never occurred at all, often supported by forged documents, false witnesses or invented circumstances.

Using another person's identity, policy or details to obtain cover or present a claim, often because the real party is uninsurable or wishes to hide involvement.

Use of another person's personal data, such as name, address or policy number, without authority to obtain insurance, submit a claim or conceal a fraudster's real identity.

A warning sign or pattern in information, documents or behaviour that suggests possible fraud and warrants further enquiry, though it is not proof of wrongdoing.

A characteristic at proposal stage suggesting possible concealment or misrepresentation, such as inconsistent answers, recent multiple applications or reluctance to give details.

A feature of a claim suggesting possible fraud, such as late notification, missing documents, unusual circumstances or pressure for quick settlement.

Deliberately overstating the value, quantity or extent of a genuine loss in order to increase the payout, often by adding items or inflating repair estimates.

A document altered or created to deceive, such as a fake invoice, receipt, medical certificate or policy schedule; its examination is a common investigative step.

The forensic or technical review of documents for signs of alteration, inconsistent fonts, overwritten entries, copied signatures or other anomalies indicating fabrication.

The documented record of who handled, moved and stored each item of evidence, from seizure to presentation, so its integrity and authenticity can be demonstrated.

The practice of securing and storing physical, digital and documentary material so it remains unaltered and admissible, including avoiding contamination and recording all access.

A person with specialised knowledge who provides opinion evidence to a court or tribunal, with a duty to be independent and objective rather than to advocate for the instructing party.

The obligation on a party to establish its case to the required standard; in civil fraud proceedings this is normally the balance of probabilities, not the criminal standard.

A structured process of gathering and assessing information about a suspected fraud, from initial referral through evidence collection and reporting, while preserving fairness and confidentiality.

A planned conversation with a witness, suspect or other party to obtain information and clarification, conducted fairly, without coercion, and usually recorded accurately.

Recording a person's account in their own words, then reading it back and obtaining confirmation and signature, so it can be used reliably as evidence.

A formal warning given before a suspect interview explaining the right to remain silent, the right to legal advice and that answers may be used in evidence.

A structured review identifying where fraud could occur, estimating likelihood and impact, and setting proportionate controls and monitoring priorities.

The overall framework of governance, policies, controls and reporting used to prevent, detect and respond to fraud across an organisation.

The policies, procedures and checks, such as authorisation limits and reconciliations, designed to prevent, detect and correct errors or fraud in business processes.

Dividing tasks so that no single person can initiate, authorise, record and review a transaction, reducing the opportunity for fraud and concealment.

Raising concerns about suspected wrongdoing through a protected channel, which should allow confidential reporting and protect the reporter from retaliation.

The use of statistical and pattern-matching techniques on large datasets to spot anomalies, duplicates, unusual relationships or other indicators of possible fraud.

Building a statistical model from historical data to score new cases by likelihood of fraud, so investigators can prioritise the highest-risk claims or proposals.

The conduct standard requiring insurers to treat customers fairly, communicate clearly and handle claims and fraud enquiries honestly, proportionately and without unfair detriment.

The professional duty to protect personal and commercial information, sharing it only on a need-to-know basis and in line with data protection and legal requirements.