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The purpose of this paper is to provide a critical examination of the current law and the possible changes that are under consideration by the Law Commissions, after public consultation in relation to the continuing duty of good faith and post‐contractual duties owed by the insured towards the insurer.

The research is addressed using case law, statutes, current academic and Law Commissions publications in the UK.

First, the paper finds that the current state of the law allows for the insurer to claim damages from an insured when a fraudulent claim is made to recover the cost of any investigations. Second the insurer can refuse to meet a claim that is tainted by fraud. Third the insurer can have the right to avoid the policy obligations upon the discovery of a fraud, but subject to some limitations. Fourth there is a need for the insured to be protected against an insurer's unjustified allegations of fraud.

This work does not address detailed issues in relation to pre‐contractual issues of good faith. These have been discussed in a previous edition of this journal see Swaby. G. (2010) “Insurance law: fit for purpose in the twenty‐first century?” IJLMA, 52 (1), pp. 21‐39. ISSN 1754‐243X.

The Law Commission will be undertaking further consultations before reforming this area of law.

This paper will be of interest to legal practitioners and academics and those in the insurance industry.

The purpose of this study is to review the reasoning of the judgment of the United Kingdom Supreme Court in Versloot Dredging BV and another (Appellants) v. HDI Gerling Industrie Versichering AG and Others (Respondents) [2016] UKSC 45 in finding that there is no remedy or sanction for the use of fraudulent devices (so-called “collateral lies”) in insurance claims and to consider potential implications for underwriters.

The methodology is a typical case law analysis starting from case facts and the reasoning with short comments on legal implications.

Despite no sanction provided by law for the use of fraudulent devices, the room still opens for the underwriters to stipulate the consequence of using the fraudulent devices by the express term in the insurance contract.

The main implication from the judgment is that underwriters are likely to incur more investigating costs for insurance claims.

This work raises awareness of the marine insurance industry (especially underwriters) as to the approach of the English law towards the use of fraudulent devices.

The purpose of this paper paper is to study effective measures in dealing with the phenomenon of insurance claims’ fraud. In fact, fraud is one of the major industry concerns. It occurs in all classes of insurance and accounts for a substantial portion of indemnity payments each year.

This paper develops a model framework based on a costly state verification setting in which – while policyholders observe the amount of loss privately – the insurance company can decide to audit incoming claims at some cost. The aim is to derive optimal auditing strategies from the insurance company’s perspective while maintaining contract attractiveness to policyholders willing to adhere to the insurance relationship. The possibility for each stakeholder to adapt its behavioral strategy over the course of several periods is taken into account. Using a numerical approach based on Monte Carlo simulations, the impact of different parameterizations on the optimal auditing range by means of a sensitivity analysis is illustrated and analyzed.

The central outcome of the model is an auditing range which selects those claims which should be subject to verification.

This paper comes to the conclusion that, given some constant cost per audit, it is optimal to verify the accuracy of claims from the mid-value segment. Furthermore, it can be shown that while the option to adapt one’s strategy might be favorable from the insurance company perspective, it has a negative impact on the policyholders’ position. This disproves the common belief that adapting the defrauding strategy with the help of signals from service providers would be advantageous.

This paper extends the stand of literature on costly state verification and gives indications for optimal auditing strategies in industry practice.

In fraudulent conveyance cases, plaintiffs allege that by entering into a complex leverage transaction, such as an LBO, a firm’s former owners ensured its subsequent collapse. Proving that the transaction rendered the firm insolvent may allow debtors (or their proxies) to claw back transfers made to former shareholders and others as part of the transaction.

Courts have recently questioned the robustness of the solvency evidence traditionally provided in such cases, claiming that traditional expert analyses (e.g., a discounted flow analysis) may suffer from hindsight (and other forms of) bias, and thus not reflect an accurate view of the firm’s insolvency prospects at the time of the challenged transfers. To address the issue, courts have recently suggested that experts should consider market evidence, such as the firm’s stock, bond, or credit default swap prices at the time of the challenged transaction. We review market-evidence-based approaches for determination of solvency in fraudulent conveyance cases.

We compare different methods of solvency determination that rely on market data. We discuss the pros and cons of these methods and illustrate the use of credit default swap spreads with a numerical example. Finally, we highlight the limitations of these methods.

If securities trade in efficient markets in which security prices quickly impound all available information, then such security prices provide an objective assessment of investors’ views of the firm’s future insolvency prospects at the time of challenged transfer, given contemporaneously available information. As we explain, using market data to analyze fraudulent conveyance claims or assess a firm’s solvency prospects is not as straightforward as some courts argue. To do so, an expert must first pick a particular credit risk model from a host of choices which links the market evidence (or security price) to the likelihood of future default. Then, to implement his chosen model, the expert must estimate various parameter input values at the time of the alleged fraudulent transfer. In this connection, it is important to note that each credit risk model rests on particular assumptions, and there are typically several ways in which a model’s key parameters may be empirically estimated. Such choices critically affect any conclusion about a firm’s future default prospects as of the date of an alleged fraudulent conveyance.

Simply using market evidence does not necessarily eliminate the question of bias in any analysis. The reliability of a plaintiff’s claims regarding fraudulent conveyance will depend on the reasonableness of the analysis used to tie the observed market evidence at the time of the alleged fraudulent transfer to default prospects of the firm.

There is a large body of literature in financial economics that examines the relationship between market data and the prospects of a firm’s future default. However, there is surprisingly little research tying that literature to the analysis of fraudulent conveyance claims. Our paper, in part, attempts to do so. We show that while market-based methods use the information contained in market prices, this information must be supplemented with assumptions and the conclusions of these methods critically depend on the assumption made.

The purpose of this paper is to survey the automobile insurance fraud detection literature in the past 31 years (1990–2021) and present a research agenda that addresses the challenges and opportunities artificial intelligence and machine learning bring to car insurance fraud detection.

Content analysis methodology is used to analyze 46 peer-reviewed academic papers from 31 journals plus eight conference proceedings to identify their research themes and detect trends and changes in the automobile insurance fraud detection literature according to content characteristics.

This study found that automobile insurance fraud detection is going through a transformation, where traditional statistics-based detection methods are replaced by data mining- and artificial intelligence-based approaches. In this study, it was also noticed that cost-sensitive and hybrid approaches are the up-and-coming avenues for further research.

This paper’s findings not only highlight the rise and benefits of data mining- and artificial intelligence-based automobile insurance fraud detection but also highlight the deficiencies observable in this field such as the lack of cost-sensitive approaches or the absence of reliable data sets.

This paper offers greater insight into how artificial intelligence and data mining challenges traditional automobile insurance fraud detection models and addresses the need to develop new cost-sensitive fraud detection methods that identify new real-world data sets.

The purpose of this paper is to review the management of consumer insurance fraud in the US property‐casualty market, attending to definition, prevalence, insurer and regulatory responses, and outcomes. A social marketing campaign is offered as a partial, long‐term solution.

This paper explicates the difficulties associated with defining and measuring consumer insurance fraud, then models the system of factors now in place in redress.

Little agreement was found for a common definition of consumer insurance fraud and this was explained in part due to the decentralization of insurance regulation, competitive factors, and inconsistency in claims processing. The paper concludes by offering a social marketing campaign as a tool for reducing the incidence and severity of single‐claims fraud, the latter believed to be the largest source of consumer insurance fraud.

This paper affords a macro‐level view of a common and expensive social problem, suggests a practical solution with the promise of reducing long‐term losses at all levels.

Manufacturers and remanufacturers strive to maximize supply chain effectiveness by eliminating wastes in all their forms. This line of research extends the effectiveness during the products' working lives. Fraud in the warranty service chain (WSC) is one such source of waste that leads to revenue losses in the short term but when left unchecked leads to far worse results in the long term. Warranty frauds in the new product industry have received significant attention in recent literature. Addressing fraud issues in the remanufacturing industry have not been a high priority. Previous studies considered the primary parties in the WSC as possible sources of fraud. However, several unique opportunities exist for the secondary parties when it comes to fraud. This chapter considers fraud originating from one of the secondary parties of the WSC, namely the warranty administrator. The chapter models this fraud scenario using discrete event simulation and explores a possible fraud mitigation scenario.

Insurance frauds deeply affect insurance companies, policyholders, and the insurance industry as a whole. The cost of fraudulent damage affects the profitability of companies, and has negative effects on the society in terms of moral values. Increases in insurance costs can lead to increases in the premiums paid by policyholders, each family, and, ultimately, all of the insured. Recently, new legal regulations related to this issue have been performed in Turkey and higher institutions have been created. A regulation issued by the Under-secretariat of the Treasury, on June 1, 2011, defines insurance fraud as aggravated fraud. Insurance fraud in Turkey usually takes the form of intentional misrepresentations of facts to the insurance company to get the company to pay for something not actually covered by the policy. Studies examined the insurance industry in terms of the concept of financial crime, and inclusion of the concept of financial crime in insurance regulations was proposed since financial crimes have an important place in the current problems of the industry. In addition, it is seen that insurance frauds have changed over time as a result of studies.

Investigates the differences in protocols between arbitral tribunals and courts, with particular emphasis on US, Greek and English law. Gives examples of each country and its way of using the law in specific circumstances, and shows the variations therein. Sums up that arbitration is much the better way to gok as it avoids delays and expenses, plus the vexation/frustration of normal litigation. Concludes that the US and Greek constitutions and common law tradition in England appear to allow involved parties to choose their own judge, who can thus be an arbitrator. Discusses e‐commerce and speculates on this for the future.

The purpose of this paper is to examine how insurance brokers control opportunism at the postcontractual stage of insurance contract in the Nigerian insurance market. Such opportunism, widely reported of insurance commercial customers, threatens the survival of the entire insurance institution while brokers' role is grossly ignored.

The paper involved the use of semi‐structured interviews of insurance broking executives and documentary analyses of how insurance brokers gather and pass on information between clients and insurers to control opportunism in the insurance market.

Findings suggest that the involvement of the insurance brokers from the claim notification stage, claim auditing to actual settlement and dispute mediation are instances of control over customers' opportunistic tendencies. Also, it is found that fear of reputation damage and brokers' professional way of handling clients' over‐exaggeration and suspicious claiming might considerably control insurance opportunism.

Involving insurance brokers in the claim settlement stage is capable of reducing insurers' claim auditing costs while guaranteeing hassle‐free claiming experience for customers and boosting the image of the insurance industry. Hence, findings are relevant for insurance companies and regulators desirous of controlling opportunism in the insurance market.

The paper extends the marketing role of brokers to the claim settlement stage by highlighting their potentials to control clients' opportunistic behaviours which threaten the insurance market.