SHANGHAI. Dec 31 : Some 20 per cent of the total payments made by China's insurance industry are based on false or fraudulent claims, the official Wenhui daily today quoted an expert as saying, reports AFP.

Speaking at a recent conference on insurance risk, Pacific Insurance Co executive Tang Dasheng said bogus claims were taking a massive toll on the industry and still accounted for as much as one-fifth of benefit payments.

The newspaper said auto-in-surance fraud was an 'especially common.”

It cited the case of two brothers in Guangzhou, who were found to have made 34 separate claims for the same accident from November 1995 to May 1997 and collected 1.4 million yuan (170.000 dollars).

In a "disgusting" recent case in Shanghai, however, a 21-year-old resident murdred his own mother with classmates' help in a plot to obtain a 420.000 yuan (50.600 dollar) accident-insurance payout.

It was the third such insurance-related matricide in China recent years.

The daily blamed the situation on an incompletely developed Insurance system and a lack of regulatory strictness.

Heavy competition among commission-compensated sales agents has promoted excessive emphasis on sales volume with little attention paid to claim assessment and adjusting.

China on November 18 established a national regulatory body dedicated too the insurance industry for the first time previously, the sector was supervised by the central bank.