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Insurance Fraud: The Law

by Dr Rebecca Mercieca – Junior Associate

‘Insurance fraud’, the wrongful obtaining of money or other benefits offered under an insurance policy occurs in three different ways, namely; the exaggeration of a genuine claim of a loss by submitting misleading or untruthful circumstances- Opportunistic Fraud.

When persons or entities stage incidents and the deliberate fabrication of a claim with the intention of gaining benefits under the insurance policy- Premeditated Fraud.

Providing false or incomplete information in insurance applications or proposal forms with the aim to mislead and gain advantage in support of a claim, such as forgery of medical documents for the sake of claiming health benefits under a health insurance policy, known as Fraudulent Non–disclosure or fraud by false representation.

Such criminal conduct is tainted by intentional misrepresentation of material facts, through the fabrication on account of misleading information.

The main provision regulating insurance fraud under Maltese law is Article 295 of the Criminal Code. This article provides a clear sanction for the punishment of imprisonment in insurance fraud cases; however Maltese courts often resort to granting a suspended sentence, due to the fact that the insurer’s aim is to recover losses incurred by fraud.

This article states that: “Whosoever, with intent to obtain for himself or for any other person the payment of any money due under any insurance against risks, or any other undue benefit, destroys, disperses or deteriorates, by any means whatsoever, things belonging to him, shall, on conviction, be liable to imprisonment for a term from seven months to two years, and, where he succeeds in his intent, from nine months to three years.”

A fraudster is one who has criminal intent and motive, one having the internal capability of will and understanding, which capability assists the fraudster to formulate a conscious decision, acting wrongfully for his own personal gain. The motive behind the criminal intent leads to the execution of the offence.

Thus, by virtue of this Article 295, even if the external motive is present and thus one merely attempts to make an illicit gain, without succeeding, it shall be considered to be a completed offence.

In Il- Pulizija vs Hugh sive Ugo Munro, Court of Appeal, (Criminal Jurisdiction) 25th June 1992, the offender had previously been the victim of several thefts, however having felt unjustly compensated by an insurance company for the loss he had incurred, he premediated to remove certain items from his property to provide the appearance of having been robbed, thus including them in the list of stolen goods and therefore, in order to make a gain he illicitly inflated the cost of the claim.

In this case, his intention to make a financial gain through his dishonesty formed the mens rea, while the actus reus was formed when he provided false information.

Disclaimer: This article is not to be considered as legal advice, and is not to be acted on as such. Should you require further information or legal assistance, please do not hesitate to contact Dr Rebecca Mercieca on