Measures to Prevent Insurance Fraud.

+ Geographical space is also a place where insurance fraud occurs. For losses that occur in remote, deserted areas with few people passing by (for motor vehicle and boat insurance), it is difficult to keep the scene intact, and changing the details of the scene to benefit the insured is very likely to happen.

+ Due to unintentional or intentional errors of insurance employees. They may accidentally write the wrong insurance participation date on the insurance certificate or due to lack of responsibility, they do not properly assess the severity of the risk. Insurance employees may also collude with customers to take advantage of insurance. They may overestimate the extent of the loss or show the way for customers to take advantage of loopholes in documents, appraisal procedures, and compensation for personal gain.

+ Due to collusion between insurance participants who commit fraud with related people such as doctors, medical staff, witnesses in accidents, risks... For example, bribing doctors to fabricate medical records or forge, prescribe expensive prescriptions to claim more insurance money... quite common in the type of human insurance.

- Consequences of insurance fraud: According to the Association of European Insurance Companies, every year they suffer losses due to insurance fraud of no less than 10 billion USD, accounting for nearly 2.5% of insurance premiums. Just from fraud cases of fire, car theft, home theft, every year insurance companies in France have lost nearly 10 billion France (according to the Insurance Business Administration textbook). Although a few numbers like that do not fully summarize the serious harm of insurance fraud to the business performance of insurance companies, they are enough to make insurers startled because the amount of loss is quite large. In our country today, no insurance company has been able to accurately calculate how much their company loses each year due to fraud.

- Some consequences caused by insurance fraud can be listed as follows:

+ For insurance companies, the calculable consequences of insurance fraud are reduced profits and limited business efficiency. It even has a negative impact on the reputation of the company.

+ For customers who are honest, their rights will be disadvantaged because the insurance premiums they have to pay are used to pay for undetected fraudulent amounts. Therefore, businesses with many fraud cases will have higher insurance premiums than businesses that are determined to fight and eliminate insurance fraudsters.

+ For society, insurance fraud is a moral risk, causing corruption and deterioration of state officials, making the business environment unhealthy and unfair. That leads to disregard for the law, disturbing social order and security.

4.3. Measures to prevent insurance fraud.

In the world, insurance companies attach great importance to the prevention of insurance fraud. Many insurance companies have established their own teams and committees to prevent insurance fraud, and in many countries, the following measures have been applied quite effectively:

- Continuously improve the legal system on insurance. For insurance services that the law requires customers to participate in, it is necessary to coordinate with the authorities to inspect, monitor and impose appropriate fines higher than the insurance premiums they must pay.

- Insurance companies must organize management units, closely monitor and inspect insurance officers, agents and collaborators. On the one hand, they must remind them to properly perform their functions, powers and duties. On the other hand, they must set up appropriate management mechanisms: insurance premiums collected during the day must be paid at the end of the day; insurance certificates issued during the day must be notified to the insurance company at the end of the day; when a customer participates in insurance with a large amount of money, it must be reported to the insurance company for inspection and monitoring...

- The process of appraisal, compensation and insurance payment must be carried out in accordance with the principles and procedures of each stage: if you find any type of document suspicious or the time and space in the loss are unclear, you need to verify it immediately. If necessary, you must immediately notify the insurance company to organize verification and investigation. In addition to the independent investigation plan, it is necessary to seek the help of relevant parties such as: local authorities, police, doctors and witnesses...

- If fraud is detected, it is necessary to closely monitor the subject, organize an investigation to verify the accuracy and ask the authorities to intervene. Experience from many countries shows that it is necessary to focus on investigating the following subjects:

+ People who participate in insurance with many different types and at many different insurance companies

+ The accident occurred close to the date of signing the contract or the accident occurred immediately after the customer purchased insurance with a large insurance amount.

+ Number of accidents increased in the same location.

+ Number of accidents caused by the same cause.

+ The insurance application is not submitted by the insured or the beneficiary.

+ Pay attention to educating awareness, responsibility, and discipline in all stages of work by staff, including agents and collaborators in the enterprise. In addition, there must be a satisfactory treatment policy for them, rewards and punishments must be very serious and disciplined.

However, monitoring and preventing insurance fraud must not affect other business activities. Especially, there must be no delay in the process of paying insurance to customers because the vast majority of customers are honest people.

Part II:

Current status of handling complaints about human insurance operations at PJICO

I. Some features of PJICO company.

1. History of birth and development.

Before 1994, in our country's insurance market, there was only one state-owned enterprise operating in a "one-man market" manner, that was Bao Viet Corporation (TCT) under the Ministry of Finance. However, along with the development of the socio-economy, up to now, in the market, there have been nearly 20 enterprises operating, competing and accelerating. PJICO Petroleum Insurance Company is one of those successful enterprises.

Two years after the government issued Decree No. 100/ND-CP on December 18, 1993, PJICO was born, with founding members having strong economic potential such as corporations: steel, petroleum, railway, Vietnam Foreign Trade Bank, National Reinsurance Company, Materials and Equipment Company, Hanoi Electronics, Safety Equipment Company Limited. The company has a total investment capital of 55 billion VND, the deposit is 2 billion VND. The total investment capital is divided into 27,500 shares, the par value of shares is 2,000,000 VND, specifically:

Table 3:List of major shareholders of PJICO and capital contribution ratio (1995)

Shareholders

Proportion (%)	Capital contribution (tr.đ)	Share (sheet)
1. Vietnam National Petroleum Corporation	51	28,050	4,025
2. Bank for Foreign Trade of Vietnam	10	5,500	2,750
3. Vietnam Steel Corporation	6	3,300	1,650
4. National Reinsurance Company	8	4,400	2,200
5. Full equipment and materials company	3	1,650	825
6. Safety Equipment Company Limited	0.5	275	138
7. Hanoi Electronics Company	2	1,100	550

Maybe you are interested!

19.5

10,725

5,362

8. Other individuals

(Source: PJICO company)

With the certificate of eligibility and conditions for insurance business No. 06-TC/GCN dated May 17, 1995 of the Ministry of Finance, the business registration certificate No. 060256 dated June 15, 1995 of the Hanoi Department of Planning, PJICO has an operating term of 25 years. After the term expires, if PJICO wants to continue operating, it must apply for an extension. PJICO's main task in the beginning is to provide insurance for member companies.

PJICO is the first joint stock company operating in the field of non-life insurance. When it was established, in the early days of operation, PJICO experienced many difficulties when the legal mechanism was not yet complete, customers were mainly potential, the staff was still small, there was not much experience, in addition to the operating capital of only over 30 billion VND, but under the timely and correct leadership of the board of directors, the support of the founding shareholders and above all the efforts of all officers and employees of PJICO quickly approached the market to deploy more than 50 types of insurance services, focusing on "hot" areas such as transportation, petroleum, construction and installation of works, import and export of goods, transportation. From motor vehicle insurance, business risk insurance, fire, installation, construction, to insurance for workers... PJICO always takes it seriously, puts quality and reputation first to attract and develop customers. In the competitive market, PJICO always proactively comes to customers with practical actions, supporting customers to quickly overcome disasters and difficulties. All businesses and people understand that buying insurance is an inevitable need, beneficial first of all for themselves, because buying it is to disperse risks, improve safety in production and business.

Thanks to that, only about 10 business locations located in big cities from the early years of establishment to the beginning of 2004 - that is, after nearly 9 years of operation, PJICO has nearly 40 branches, of which in 2003 it accelerated the development of 12 new branches. From the North Pole - Cao Bang, Lang Son to Kien Giang, Ca Mau of the country. It can be said that everywhere there is the "humane hand" of PJICO. From the company's customers being only shareholders, the company now has thousands of customers in all fields, industries, and economic sectors. The customer structure continues to develop in a sustainable direction. All major insurance fields such as construction, installation, goods, ships, motor vehicles, and people have significantly increased the number of new customers in addition to traditional customers. In addition to customers in major economic centers such as Hanoi and Ho Chi Minh City, PJICO's exploitation market in other localities has been expanded. The company has established good cooperative relationships with many large and potential customers in all different sectors of the economy (transportation, electricity, cement, steel, chemicals, minerals, goods, shipbuilding, construction, industry, hotels, import-export, petroleum, banking, etc.). The proportion of non-shareholder revenue is up to 90%. Now PJICO has truly become a multi-industry national insurance company.

Since its establishment, after nearly 9 years of operation and development, PJICO has divided its capital according to shareholders' contributions and taxes payable to the state budget. Total fee revenue after nearly 9 years of operation reached about 300 billion with an average fee growth rate of 39%/year.

2. Organizational structure.

PJICO is an insurance enterprise, organized, with legal status operating in close relationships between members and between business departments to achieve a common goal under the unified leadership and management of the board of directors.

Organizational structure is the form of existence of an organization that represents the arrangement of specialized departments with certain responsibilities and authorities, closely related to each other... to perform management functions.

The organizational structure of a business must meet the strategic business requirements of that business, which also means that the formation of the organizational structure must ensure efficiency and effectiveness.

flexible, not rigid, can change appropriately to the conditions affected by the ever-changing operating environment of the business.

Organizing a business with a reasonable model is the content of implementing a business strategy, but on the other hand, the organizational apparatus is a very important tool to implement the business strategy of the enterprise. In that sense, the organization of an enterprise to implement the proposed strategic goals.

An enterprise's organizational model must meet the above basic requirements and PJICO is no exception. PJICO is headquartered at 22 Lang Ha - Dong Da, Hanoi, operating within the legal framework. This is where the enterprise's business strategy is built and PJICO's internal and external activities are managed.

Under the headquarters is a system of departments. Branch offices are responsible for carrying out business activities according to the hierarchy of the enterprise management. PJICO has an organizational structure that strictly follows the structural order of a joint stock company, which is shown through the following model:

Shareholders meeting

Board of Directors

General Director

Deputy General Director

P. Summary

P. Compensation

P. Reinsurance

P.BH Marine

Accounting Department Organization Department

Property Insurance Department, Northern and Regional Offices

P.Non-marine insurance

VPBH branch in the region

Figure 1: Organizational structure of PJICO

With the above organizational structure model, PJICO has shown to be extremely dynamic and flexible in the face of changes in the business environment, grasping and promptly and attentively serving the needs of customers. This is one of the main factors that has brought PJICO to its current success.

II. Business performance results

1. Advantages and disadvantages

1.1 Advantages

PJICO received great support from its member shareholders in the early days of its establishment. This is one of PJICO's great advantages, helping the company to stand firm in the market when doing business in the insurance industry is still very new.

As the first joint stock company to operate right after the government's Decree 100-CP, although facing many difficulties, PJICO quickly gained a certain market share, creating conditions for stable and solid development in the future.

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