Kathmandu. The foreign employment insurance system, which is supposed to be a safety net for millions of Nepali migrant workers, has found itself mired in serious fraud. What used to be heard of sporadically has now emerged as organised and high-level crime, making fake deaths, forged documents and the fate of the victim’s family a tool of fraud.
The complex nature of the new scam
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The Central Bureau of Investigation (CIB) has recently busted a fraud network, in which a woman who died in Nepal with the collusion of government employees and relatives was claimed as insurance money on the pretext of her death abroad. The detection of fake immigration documents, fake labour permits and fake medical reports shows the level of courage and preparedness of the fraudsters.
According to CIB sources, scattered fraud cases used to happen in the past as well, but in 2025, the number and complexity of fraud attempts in foreign employment insurance have broken all previous records.
Confidential data of the insurance industry
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Our exclusive research has exposed the dire situation within the insurance sector:
More than 26 million Nepali workers have active foreign employment insurance, which is mandated under government management.In the first nine months of this year, more than Rs 2.75 billion has been collected in premiums from this category. Such a large amount of money has become lucrative for criminal gangs.
Insurance companies have reported an unprecedented increase in suspicious claims. Some company operators even admit that “up to 10% of all foreign employment insurance claims require special checks.”Despite strict surveillance, at least half a dozen high-profile fraud attempts have been thwarted this year, some of which have involved local government offices or foreign employment agents.
Where’s the weakness of the current system?
Systemic flaws are responsible for such a massive fraud outbreak: When embassies or missions are understaffed to verify deaths abroad, it is easy to rely on forged documents.Poor coordination between insurance companies, local government offices and the Foreign Employment Board has left legal loopholes for fraudsters.
The fact that some claims, especially during elections, are settled quickly under political or social pressure, has further encouraged those who misuse them.
Human Damage Caused by Fraud
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Honest and genuine victims’ families have paid the highest price for this fraud. As the circle of suspicion grows, there is a delay in the payment of genuine claims. On the other hand, some desperate families have fallen into the trap of ‘setting up’ middlemen for the lure of easy payments.
This crisis has now raised a big question mark not only on money but also on the credibility of the entire social security system that Nepal has built for its citizens. If transparent and drastic reforms are not implemented immediately, it will jeopardize the very lifeline left for millions of working families.
