Kathmandu. The Insurance Regulatory and Development Authority of India (IRDAI) has mandated insurance companies to formulate policies and frameworks to prevent insurance frauds in India.
IRDAI has made this mandatory to curb insurance frauds. Now companies will have to mandatorily prepare and implement fraud prevention policies and frameworks.
IRDAI has been receiving complaints of frauds from insurance purchases to claim payment processing. Sometimes, honest customers are forced to pay a high price due to this fraud. While other cases of fraud in insurance claims are often disclosed by the hospital or the customer.
Insurance experts believe that 10-15 percent of insurance claims are either false or exaggerated. In some parts of India, the average fraud rate in health and motor insurance claims is 20-25 per cent.
IRDAI believes that preventing insurance frauds will protect the interests of honest customers and strengthen the financial health of insurance companies.
Many health insurance companies repeatedly accuse hospitals of inflating treatment costs. As a result, companies frequently threaten to shut down cashless treatment. IRDAI has ordered that all insurance companies should set up a fraud monitoring committee headed by a senior officer.
Similarly, an independent fraud monitoring unit will be set up to report frauds in real time. Insurance companies will report all frauds to the police and submit an annual report to IRDAI.
