Kathmandu. According to the report of the Financial Intelligence Unit (FIU Nepal) of Nepal Rastra Bank, reporting on suspicious transactions received from life insurers has increased significantly in the last one year.
In 2023, the life insurance company received details of suspicious transactions worth Rs 35.8 million, which increased to Rs 154.3 million in 2024. According to the report, the amount of suspicious transactions has increased by 330 percent compared to the previous year.
With the increasing competition among life insurers, the tendency to accept undisclosed amount as insurance fee has increased, it is said that suspicious transactions have increased. According to the life insurer, the other insurer accepts a high-risk proposal in terms of asset purification that has been rejected by one person on the ground that the source is not known.
Everyone has been instructed to do underwriting with full caution for fear of facing cases in property purification, one of the underwriting department heads said in mixed words, the proposal we rejected is accepted by the other. According to him, some life insurers are also easily accepting the proposal of a large sum assurer who has come with cash and not from a bank account.
At a time when the Financial Action Task Force has included Nepal in the ‘grey list’ citing weak regulation in the financial sector, negligence in financial underwriting of some life insurers runs the risk of defamation in the entire insurance sector.
Life insurance companies have to accept Rs 100,000 or more only through bank transactions, digital payments or cheques. Despite such provisions, the AUTHORITY has found ample evidence that most of the life insurers have received payments from individuals or sources who do not even have employees or agents or relatives of the insurer or do not have insurance interests.
All proposals to be accepted by a life insurer through a single insurance fee to pay more than Rs 100,000 are included in the list of suspects.
According to the report, while the size of the amount has increased in the suspicious transaction reporting of the life insurer, the amount of suspicious transaction has decreased in the reporting of the non-life insurer. In the previous year 2023, the non-life insurance company sent the details of suspicious transactions worth Rs 5 00,000 to the FIU, in the year 2024, such amount has come down to Rs 3 00,000.
In 2024, 82 suspicious transactions were received from life insurance companies and seven from non-life insurance companies.
