Insurance fraudsters will find cover more expensive and harder to come by as the industry sets up a database of known claims crooks.
The Insurance Fraud Register of proven scammers will cover all forms of insurance – and every application will face a routine check.
Anyone on the database will have problems in arranging cover – or have to pay higher premiums.
Most insurance companies will join the database, which will cover home, car, personal, travel and business policies.
Checks are expected to start in July, after the IFB and ABI signed contracts to set up the scheme.
Richard Davies, head of fraud at Axa, who is leading the project, said: “The signing of the contracts is an important step as we move towards delivery of the IFR during the summer.
“Over the coming months, we will step up our engagement with insurers to ensure they are ready to participate. We will also be talking with consumer organisations so that they fully understand what the register will mean for consumers.
“While insurers remain committed to paying genuine claims as quickly as possible, committing insurance fraud will have long and serious consequences.”
An issue for consumers is how the IFR will define a ‘proven fraudster’.
That could mean someone with a conviction by a court – or the definition could include someone who has had an inflated claim rejected.
“Dishonest motor insurance claims are paid for by honest customers – this is why insurers are determined to stamp them out,” said an ABI spokesman.
“Sharing information reduces insurance fraud. Not only will it help detect more fraud, but it will act as a strong deterrent, making anyone thinking of cheating on their insurance think twice.”