Do not invent an insured accident or inflate a claim; knowing helpers can share criminal liability
Fabricating an accident or exaggerating losses to obtain insurance money can be insurance fraud. At the basic criminal level, the sentence is up to five years plus a RMB 10,000–100,000 fine. A person knowingly supplying false testimony, assessment, or valuation to make the fraud possible can be an accomplice. In the cited Anhui case, eight people received two to four years and RMB 10,000 fines each.
What it takes
Nothing to refrain from it.
What you may gain
Criminal Law Article 198 identifies five categories: inventing an insured subject that does not exist; fabricating the cause or exaggerating the extent of a real loss; inventing an event that never occurred; intentionally causing an insured property loss; and intentionally causing the insured person’s death, disability, or illness to obtain payment. A relatively large amount carries up to five years or criminal detention and a RMB 10,000–100,000 fine. A huge amount or serious circumstances brings five to ten years and RMB 20,000–200,000. An especially huge amount or especially serious circumstances brings at least ten years and RMB 20,000–200,000 or confiscation. Knowing false documentation by an accident assessor, witness, or property valuer that enables fraud can create accomplice liability. Insurance Law Article 27 permits cancellation without refund where a nonexistent insured event is falsely claimed. For forged materials, invented causes, or exaggerated loss, the excess is not payable and amounts already obtained must be returned or compensated. In the Xuancheng Zhang case, Wang and seven others received two to four years for insurance fraud and RMB 10,000 fines each. A related sham civil claim used a forged vehicle-transfer agreement to establish standing; although the insurer assessed RMB 20,000 loss, a court awarded over RMB 70,000. That effective civil judgment was revoked on retrial on 26 September 2019. The anti-insurance-fraud measures issued on 31 July 2024 require risk checks at both underwriting and claims stages and call for multi-line industry fraud-information platforms and intelligence centers. Suspicious data are screened centrally, leads checked by associations, anti-fraud bodies, and insurers, and suspected crimes reported to police. Financial regulators must strengthen coordination with police, prosecutors, and courts.
Context & considerations
Asking a repair shop to “add a little,” claiming old damage as new, staging a collision with a friend, or inventing an incident all fit the underlying fraud concerns. For legitimate cover, see adequate third-party vehicle insurance. Intentionally harming an insured relative can bring combined criminal punishment; see chapter 8, entry 38. Basic medical-insurance fraud follows separate rules; false card transactions or cashing out a personal medical account are discussed in chapter 5, entry 13.
Research & references
Standing Committee of the National People’s Congress. Criminal Law consolidated through Amendment XI, Article 198. https://flk.npc.gov.cn/detail?id=ff808181796a636a0179822a19640c92; Standing Committee of the National People’s Congress (amended 2015). Insurance Law, Article 27. https://flk.npc.gov.cn/detail?id=2c909fdd678bf17901678bf7c4060811; National Financial Regulatory Administration (2024). Notice issuing the anti-insurance-fraud measures. https://www.gov.cn/gongbao/2024/issue_11586/202409/content_6975080.html; Anhui People’s Procuratorate, reposting Legal Daily (13 January 2020). Insurance murder exposing a related case. http://www.ah.jcy.gov.cn/jczt/jjslhyqkjc/mtjj/202001/t20200113_2758841.shtml.