Banking & Finance

Where’s my reward?

Police demand ‘incentive fees’ from insurers to track down stolen cars

Where’s my reward?

“Do you think I do this for fun?”

“We’re delighted to inform you that we’ve found your stolen car” is one of the more pleasant pieces of news a police officer can deliver.

But for Mr Wang there was a less welcome follow-up: to get his car back, he needed to pay Rmb38,000 ($6,026).

Wang had purchased an off-road vehicle for Rmb257,800 in 2011 and bought full insurance coverage from Ping An. Last month his car was stolen from Anyang, a loss which he immediately reported to police.

The Worker’s Daily reports that two days later he received a note from police in Zhengzhou, another city in Henan province, telling him “they’d cracked the case and found his car”.

But the newspaper adds that when Wang went to Zhengzhou to reclaim his vehicle, he was told by officers that “in accordance with the relevant provisions”, he needed to pay “an incentive fee” to get his car back.

Wang reports being exasperated by this – weren’t the police just doing their job? – until he discovered that this was in fact a longstanding practice.

The Worker’s Daily confirms that the arrangement dates back to 1994, when the Ministry of Public Security and the People’s Insurance Company of China did a deal.

PICC – which then had a near monopoly on vehicle insurance cover – wanted the police to recover more stolen cars as a way to keep down its payouts.

So a reward scheme was agreed: if a stolen car was found the insurer paid the police 10% of the value of the vehicle (if it was discovered further afield than the city in which it was stolen, the percentage could go as high as 20%).

Wang’s car was found in the same province but in a different city, which meant the fee was calculated at Rmb38,000.

Not keen to pay this sum himself, Wang was helpfully told by police officers that his insurance company was liable for the sum. So he approached Ping An, only to be informed that he himself should pay the fee, get an invoice from the police, and then seek reimbursement.

Matters then took a Kafkaesque turn when Zhengzhou police refused to issue an invoice. After days of dispute, the matter is still not resolved. The incentive fee has not been paid and the newspaper reports that Wang is still without his car.

Ironically, Wang was probably worse off for having purchased fully comprehensive insurance coverage. In another case last year, a Mr Qin from Beijing had his own car stolen, and a day later was told that police in Zhuozhou City in Hebei had found it.

However, in Qin’s case the car was worth only Rmb20,000 and was not insured against theft. That meant that police couldn’t ask the insurance company for a reward, and instead asked Qin to pay an incentive fee. He haggled them down to Rmb500 and drove home.

The Worker’s Daily then consulted an expert to check if the current arrangements are legal. Liu Jing, a doctor of law from Zhengzhou University reckons they aren’t. He cites two regulations promulgated by the Ministry of Public Security in 1998, both of which bar the police from collecting “arbitrary charges” for the recovery of stolen vehicles. “Clearly, the practice of charging an ‘incentive fee’ is inconsistent with the relevant provisions of the Ministry of Public Security,” the Worker’s Daily concludes.

Liu says too that the practice of collecting these fees raises much more basic questions. Does it mean an officer will work less hard to solve crimes in which an incentive fee is not going to be offered? And what about other public servants? “Should the fire brigade be rewarded for successfully fighting a fire?” Liu asks.

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