Abstract
In an attempt to elucidate questions of seriousness in relation to crime and terrorism, this paper draws on academic and wider literature and on interviews with those in the businesses of insurance or private security. Levels of seriousness may range from petty and irritating, through truly serious, to potentially catastrophic. Critical issues are highlighted within three strategic perspectives: legislation/regulation in support of public security; market regulation (in particular European single market), fair competition and customer safeguards; and the role of the private sector in reforming and restructuring the public sector. Serious crime risks identified, some of which may be re-shaped by regulation, concern risk-pooling for terrorist risks and potential for moral hazard and laxity; insurance broker frauds and prospects for reduction (through transparency and whistle-blowing) or displacement (through regulatory arbitrage); insurance customer claim frauds (which may be orchestrated) and targeting of them by private security services (limited or over-zealous?); and redistribution of risks and benefits by an industry lobbying for regulation to restructure data protection rules and civil liability. Concepts and sources explored might be points of reference for future work, alongside important questions about social distribution of costs and benefits (‘winners’ and ‘losers’) resulting from legislative/regulatory reforms. More generally, the authors underline that crime impact assessment should be made conformant with wider EU Impact Assessments. The method should utilise a consistent analytical approach at each stage of assessment (screening, initial assessment, extended assessment). Those involved in making assessments should include officials with specialist knowledge, market participants, compliance/enforcement persons and an independent element.
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Notes
By ‘pool’ what is meant is ‘pooling’ in the sense of sharing; by Re what is meant is reinsurance risk. If a terrorist attack or other exceptional event causes exception claims on one or some insurer, then its peers are obliged to pool/share the burden, with government financial support as a back-up.
Ironically, the ‘Clash of Civilisations’ construct would bolster such a view on the basis that this is a perpetual rather than temporary conflict, based around global threats rather than more local ones such as ‘the troubles’ of Northern Ireland. However, though the general argument may be sound, it is not obvious how one actually does ‘normalise’ such a conflict by getting the private insurance sector to self-insure.
Sources: CBFA website http://www.cbfa.be/eng/index.asp and author interviews with security manager of Assuralia, the Belgian insurance industry association.
Sources: author interview notes, Lloyds, autumn 2004 and supporting documentation seen.
In this respect, one might note that some stigmatised minority communities likewise resent the policing they receive. Some communities have greater resistance powers than others.
This possibility also underlines the more general point, made in Chap. 3 above, that assessment of directives may be difficult to carry out with any uncertainty unless the transpositions by member states into national laws are also considered.
Hence, the contemporary row over whether the UK’s Export Credit Guarantee Department must - as a condition of insurance - require companies it covers not to pay ‘commissions’ or bribes to public officials overseas. Here, issues of level playing fields in practice, and not just in rules, can be acrimonious, and what counts as evidence of violation is far from agreed.
Source: author interview with Assuralia in 2004.
There is a specific prohibition on police giving such information: law about status of police employees, 5 August 1992.
The present authors were offered the following as a hypothetical case study. A police officer, investigating car theft offences, suggests to an insurance agent that an insurance broker might have been involved in faking the theft of cars (rather like phoney warehouse fires). This information is passed to an insurance industry investigator who looks into the possibility, develops information and hands it to the police. A case is brought is prepared for trial but cannot be taken forward by prosecutors because it is apparent to prosecutors that information was improperly given by police to the insurance investigator. The case is dropped. Further cars go missing...
Interviews carried out by the authors.
Interviews carried out by the authors.
From an earlier approach by Savona (Savona, 2004), developed and explored by the present authors in relation to legislation/regulation bearing on the conduct of private sector managers and auditors, this volume.
This being the position arrived at by the MARC consortium in October 2005, see Savona, 2006 this volume.
Even if they were objectively independent enough, others might not believe that they were or might claim that they were not to further their own objectives.
Relatedly, we may need a better understanding of non-reversibility of consequences in the security field. This is not the same as catastrophic: an impact may catastrophic but reversible, even positive in some respects in the longer term. Indeed the concept of catastrophic may be somewhat overworked, with that of irreversibility. Both concepts may mask issues about the social distribution of costs and benefits (see main text).
Levi’s relevant consultancy and research includes work for the Foresight Crime Panel, Home Office, and National Audit Office within the public sector, and major accounting and law firms in the private sector.
For a helpful overview, see Hood et al., 2001, although the present authors would not necessarily follow the conclusions drawn by Hood et al.
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Acknowledgements
On behalf of Cardiff University the authors gratefully acknowledge a grant by the European Union’s Sixth Framework Programme, Priority SSP/8, proposal number 1501634, project ‘MARC’. The work reported here is based on a reading of the literatures on insurance and on private security; European Union policy and news source searches; telephone enquiries and email exchanges; personal interviews with practitioners in private security and in insurance in the summer of 2004; a re-reading of early papers by research consortium colleagues (this volume); and reflection on the objectives of the project. More loosely the work draws upon interviews with senior security managers, finance directors and auditors in 2003 (Levi, Morgan, & Burrows, 2003/4, pp 7–28), consultancy and researchFootnote 18 over some years, alongside general research and analysis of others.Footnote 19 The authors benefited from papers from Tom Vander Beken and Annelies and Balcaen at Ghent University (Vander Beken & Balcaen, 2004), and from Seppo Leppa in HEUNI, reviewing relevant developments in private security and insurance, regulation and crime risks in the Belgian and Finnish contexts respectively. Valuable assistance was given by senior staff of Assuralia of Belgium, Lloyds of London and a number of people working in private security (Leppa, 2004). Needless to say the information and views presented here remain the responsibility of the authors.
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Dorn, N., Levi, M. Regulation of Insurance and Corporate Security: Integrating Crime and Terrorism Seriousness into the Analysis. Eur J Crim Policy Res 12, 257–277 (2006). https://doi.org/10.1007/s10610-006-9024-1
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DOI: https://doi.org/10.1007/s10610-006-9024-1