Fraud - 10 Questions To Ask Yourself

Fraud risk remains a constant problem for the General Insurance Industry. The consequences of this risk are not exclusively financial; they can also affect the organisation's reputation and as we have seen in recent events may result in an investigation by regulators.  Here are some of the questions you could ask that can help identify and control fraud risk in your organisation: Have you identified high risk areas for fraud? Are the right people involved in high risk decisions? Are the right number of people involved in high risk decisions? Are appropriate background checks carried out on employees and representatives? Are there processes in place to monitor and manage outsource suppliers? Are relationships between staff, clients or suppliers managed and monitored? Is there any system of peer review or file audit? Do you undertake external audits of your compliance system? Do you undertake external reviews of your business processes? Do you undertake “mystery shopping” or other monitoring and supervision activities? While the risk of fraud can never be eliminated, we can all stay vigilant to reduce the likelihood of it occurring in your business.  If you would like any assistance in managing your fraud risk, please contact Gold Seal 03 9510 5100 or submit an inquiry on our website.

What is misleading or deceptive conduct?

"Misleading or deceptive conduct" is a term of major importance in relation to all businesses' dealings with other parties. 

Its prohibition can be found in the Australian Consumer Law (which is contained in the Competition and Consumer Act) and the various State and Territory Fair Trading Acts, which prohibit businesses from engaging in misleading or deceptive conduct in trade or commerce.

 

Conduct will be misleading or deceptive if it induces error, or is capable of inducing error, in an ordinary reasonable person.  When determining whether conduct is misleading or deceptive:

• it is the overall impression that counts;
• the dominant message is the most important, not the "fine print".  

Misleading or deceptive conduct can consist of spoken or written words or any other conduct such as gestures, body language or even silence or lack of response. A company can engage in misleading or deceptive conduct by reason of the actions of its officers, employees or agents.

Conduct can give rise to liability even if:

• it has not actually misled anyone.  All that is necessary is that the conduct is likely to mislead or deceive people;
• the person making the representation acted honestly and reasonably.  All that is necessary for liability to arise is that the conduct did, in fact, mislead or deceive; and
• the affected person did not make proper inquiries, or could have discovered that the conduct was misleading or deceptive had they investigated the matter.
• The above definition is quoted from website Australia Gvt small business

Steadfast float attracts all majors

Steadfast managing director and CEO Robert Kelly has revealed that “several” network brokers have expressed an interest in the allocation of IPO shares.

Kelly made the statement yesterday as the cluster group issued a replacement prospectus, outlining that the final number of shares to be issued to vendors will be 135 million, with plans to raise $334m from investors.

“The replacement prospectus is an important milestone in the IPO process,” Steadfast managing director & CEO, Robert Kelly said. “A large number of vendors have opted to receive consideration shares as part of the IPO Acquisitions. In addition several network brokers have indicated an appetite for an allocation of shares in the IPO Offer.

“The IPO is on track and progressing as planned, and I look forward to the weeks ahead.”

The consideration shares will be issued following the elections made by relevant vendors of equity interests in businesses being sold to Steadfast (IPO acquisitions), following their review of the prospectus.

All consideration shares are subject to escrow restrictions from the date of the issue of those shares until 31 August 2014 (subject to certain early release conditions referred to in the prospectus).

The total shares on issue immediately after completion of the IPO will be between 490 million and 545 million.

The IPO will be offered to certain investors at an indicative price range of $1.00 to $1.20 per IPO share with an expected market capitalisation of $545m to $587m based on the Indicative price range. The final price per IPO Share will be determined at the conclusion of a book build process on or around 30 July 2013. The final price may be set within or above the indicative price range of $1.00 to $1.20 per share.

Upon listing, the vendors together with Steadfast network brokers are expected to hold 37-41% of the shares in Steadfast, reaffirming their commitment to the business and its future success.

The IPO is conditional on achieving a final price of at least $1 per IPO share, Steadfast completing acquisitions representing at least 93% of the aggregate purchase price of all Acquisitions, ASX granting conditional listing approval and final board approval.

The prospectus is available in electronic form at www.steadfast.com.au. Eligible investors should consider the prospectus and read it in full in deciding whether to acquire Steadfast shares. If you want to acquire shares, you must complete the relevant application form in, or which accompanies, the prospectus.

Perth has it's lion share of Steadfast Insurance brokers, some of the most notable are

• Central Insurance Brokers, South Perth 

• Phoenix Insurance brokers, South Perth

• Centrewest Ins brokers

• LTM Risk Brokers 

Disaster “funding paralysis” Industry needs to lead

“As leaders of our respective communities, we need to work together to develop a national long-term approach to managing natural disasters by investing in a co-ordinated resilience response that focuses on prevention,” he added.

The insurance industry must do more than just pay claims in times of natural disasters, they must be leaders too.

These are the words of CGU CEO Peter Harmer who told a breakfast briefing of key government officials, business, community and emergency services stakeholders there was a collective responsibility to prepare the nation for natural disasters.

Turning to insurers, Harmer said their own role was more than just paying claims. “I believe we have a leadership role to play in addressing the funding paralysis that undercuts government effectiveness in delivering necessary prevention,” he said.

He also called for stakeholders to build a collective responsibility to natural disasters to build the nation’s capacity to respond to natural disasters and ensure that future generations are protected.

 “The financial and emotional burden of natural disasters is immense and the human toll is even more confronting,” he said. “In just the last four years alone, natural disasters in Australia have claimed more than 200 lives and directly affected hundreds of thousands of people.”

He highlighted the importance of identifying and prioritising pre-disaster investment activities that deliver a positive net impact on future budget outlays. “By identifying and prioritising pre-disaster investment activities that deliver a positive net impact on future budget outlays, we can build disaster resilience and safer communities.”

However, he conceded that managing natural disasters was more than just the economic cost.

 “It also has long-term psychological and physical costs to our communities which, if better managed, could be avoided. Natural disasters are enormously stressful, turn lives upside down and take away our sense of security,” he said.