Under the 2015 Penal Code (amended 2017), insurance fraud is defined as deceit in insurance dealings to illegally claim payouts.

Recent cases of killing others or self-harm for insurance money have stirred uproar.

One of the cases occurred in Phuc Tho, Hanoi, in 2016. L.T.N. hired a local to chop off part of her hand and foot, faking an accident for a VND3.5 billion payout. The plot flopped, leaving her permanently disabled.

The 2017-2018 “thumb accident” wave in southern Vietnam drew eyes too. Many claimed work injuries but had bought multiple short-term policies from various firms. Though unproven as self-inflicted, these faded after insurers probed and exposed false claims.

Some even murdered for life insurance cash.

On April 5, 2025, Quang Nam police announced the arrest of To Thi Ty Na, born 1981, in Ha Lam town of Thang Binh district for killing her son to scam life insurance. Around 10pm on January 2, 2023, at Na’s home, her son Nguyen Van H, born 2017, died in the bathroom. Police confirmed Na killed him to claim insurance.

The 2020 case of Do Van Minh, Party Secretary of Lien Ha commune in Lam Dong, rocked headlines too. Deep in VND20 billion debt, he bought life insurance, then killed someone to fake his own death, aiming for a VND18 billion payout. The scheme failed; Minh was caught and sentenced to death.

Another case tied to payouts for the deceased. In 2024, Nguyen Thi Hong Bich, born 1986, in Dong Nai allegedly killed family members, pocketing VND800 million in insurance benefit.

Notably, the act of insurance fraud is not only committed by an individual, but involves many people, even a tightly coordinated network to easily deceive insurance companies, including the orchestration and assistance of medical staff.

On August 23, 2024, the Naval Command Military Court tried a case of “one client buying 19 insurance policies” since 2019 to swindle billions of dong. Nguyen Van Khanh, Vu Thi Ngoc Ha, Phan Thi Trang, and Le Duc Phong were convicted of “fraudulent property appropriation.”

Earlier, in July 2023, Nghe An police launched a probe into health insurance fraud at some medical facilities, including staff at Vinh Medical University Hospital and Tan Ky Medical Center. They faked hundreds of fracture records, siphoning VND10 billion.

Insurance fraud has been found not only in healthcare and social insurance, but also in agriculture insurance. This is one of the reasons why non-life insurers are not interested in this type of insurance product.

These scams don’t just bleed insurers dry, but they also hurt honest clients, hike premiums, and erode public trust in the insurance industry.

These scams don’t just bleed insurers dry, but they also hurt honest clients, hike premiums, and erode public trust in the insurance industry.

How to curb insurance fraud?

Insurance fraud is grave. Stopping it demands effort from authorities and insurers to shield honest policyholders’ rights.

Nowadays, thanks to tech advances and tight oversight, the industry is sharpening its fraud detection and prevention.

Countries in the world have applied various solutions to prevent insurance fraud. The US has bodies like the National Insurance Crime Bureau (NICB) and National Association of Insurance Commissioners (NAIC). The UK, Australia, and others use dedicated databases to spot fraud. Whistleblower incentives are widespread too.

In Vietnam, laws have toughened. Since 2015, insurance fraud has been criminalized in the Penal Code. Three sanctions apply:

Civil sanctions: if the insured party provides false information to enter into an insurance contract, the insurance company has the right to cancel the contract and refuse compensation. If the contract is fraudulent, the contract will be invalid and the parties must return what they have received.

Administrative sanctions: Under Decree 98/2013/ND-CP, fraud can draw fines up to VND100 million if not criminal.

Criminal sanctions: The 2015 Penal Code (amended 2017) tags insurance fraud as “fraud in insurance dealings” or “property theft by deception”. Penalties top out at seven years in jail, or life for severe cases, plus fines and other measures.

Tuan Nguyen