Effect Of Forensic Accounting Practices On Claim Settlement Efficiency In Health Insurance Sector In Kenya

Abstract

The vast majority of insurance plans include common statement indicating that in the event of a fraudulent claim, all policy benefits are null and void. The fraudulent insurance claims have the ability to destabilize the economy, bankrupt financial and banking institutions, damage government operations, disrupt tax-funded development efforts, and erode public trust in government administration. The purpose of this research was to determine the effect of forensic accounting techniques on the efficiency of claim settlement in Kenya's health insurance sector. Among the specific goals was to investigate the effect of fraud detection technologies, litigation support strategies, and dispute resolution practices on claim settlement efficiency in Kenya's health insurance sector. The study is significant to insurance companies, Insurance Regulatory Authority of Kenya and future, academics and researchers. The study was anchored on Occupational Fraud Theory, Moral Hazard Theory and White-Collar Crime Theory. The study adopted descriptive research design. The population of interest constituted administrative staff from head offices of medical insurance companies. The study adopted census design whereby all the 32 medical insurance providers were involved in the study. The questionnaire was the main primary data collection method. The data was quantitatively analyzed aided by SPSS package to generate percentage ratings, frequencies inferential statistics. Presentation was done in form of tables. The study found that in fraud investigation, it could be easier to monitor and keep trail of any fraud if it arises considering that systems of claims settlement are in place. In litigation support, clients might receive assistance from insurance companies to reduce the cost effect of the risk of legal action while others claim that insurance companies may not necessarily engage in helping clients on various legal engagements. Lastly, in dispute resolution, settling a dispute about claims can be done through court of laws, thus, providing documented evidence for claim processing. However, this may amount to notable inefficiency as court proceedings may last longer than the claimants anticipate. The study recommends that policy makers in the insurance companies should ensure that fraud investigations are properly documents and be carried out in the shortest time possible to fulfill expected efficiency in claim settlement. Still, the companies should be obligated enough to invest own funds to take care of legal claims in relations to litigations. The management of the insurance firms should ensure that they put in place dispute resolution mechanism that is workable and that can support quick settlement of complaints on claims.