The Murder of Sarjan BK Once Again Exposes the Poor Underwriting in Nepal

Kathmandu: The ongoing unhealthy competition has directed the whole insurance industry to a wrong direction. Mostly, in the life insurance companies, the fierce competition for higher volume of new business has resulted murder of some innocent lives.

Recent murder of Sarjan BK, a homeless guy, has left many questions unanswered. The poor financial underwriting performed by Reliance Life Insurance and Nepal Reinsurance (Nepal Re) has resulted the loss of his life under a well-planned insurance scam. Sarjan, a 21 year old youth from Banke district, succumbed to death following a so-called road accident.

Reliance Life Insurance had issued an endowment policy of Rs.1 crore and a term plan of Rs.50 lakh. His so-called wife Sapana Malla had received Rs.2.50 crore death claim after his suspicious death. BK was completely unaware that someone had purchased two life insurance policies for him. Further, the name of Sapana Malla, a local girl, was mentioned as nominee in his policy contract. But Police investigation found that BK was never married.

Sarjan BK used to work as a laborer for a sand depot of Sanjiv Aryal, the master mind behind the insurance fraud and the brutal killing.

Reliance Life had released the death claim prior to receiving the claim from it’s re-insurer, Nepal Re. While undergoing the claim against Sarjan BK’s death, Nepal Re’s claim department had some rat smell and they forwarded the case to the Central Investigation Bureau(CIB) of Nepal Police.

During the investigation, CIB revealed that Sarjan was never married, never went to the bank to open an account and never applied for his life insurance.

The practices of poor financial underwriting, moral hazard underwriting and medical underwriting among life insurers is rampant. Within 3 years, 3 innocent lives including a girl child, have been killed for life insurance claim. In all the three cases, including the murder of Sarjan BK, the reliable proof for source of income is missing.

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