Kathmandu. The tendency of fraud in insurance claims has flourished as the issue of setting up an insurance information center is limited to paper. Not only is the tendency of fraud on the rise, but the employees of NEA and Life Insurance Company have had to be harassed for four years due to fake claims and complaints demanding payment for such claims.
Jharilal Kamait, a resident of Sukhipur Municipality-10 in Siraha, passed away on April 30, 2019. The locals and the people’s representatives of the ward will keep the deceased alive for one more day. The death certificate issued by the local level Sukhipur Municipality Ward No. 10 on May 14, 2019 states that Jharilal died at his home in Kalgiti at 6:00 pm on April 1, 2019. In another death registration certificate issued 20 days later, i.e. on June 7, 2019, the ward municipality has also prepared a land document stating that Jharilal died on April 30, 2019 near Kamala River in Siraha.
After his death, the family members of the deceased died at home on April 16, 2019 and take the amount from the National Life Insurance for foreign employment insurance. On the basis of another death registration certificate, his wife has filed an application with Surya Life Insurance claiming that his death occurred accidentally near Kamala River on 17th Baisakh 2076 BS.
What is interesting here is that the next day after his death, the family members of Jharilal bought a foreign employment term insurance policy in the name of Jharilal saying that he would go for foreign employment again.
In the insurance sector of Nepal, a serious question has always remained unanswered, how to know when insuring the same property or person in many places.
The answer is obvious, we don’t have an insurance information center. Taking advantage of this vacuum, claim fraud is now being promoted in an organized manner in the insurance sector. How can there be fraud when there is no center? As long as one company’s data is not seen by another company, the insurance sector will become an easy place for criminals.
In the absence of a information center, the following three types of fraud are taking place
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Dual Claim: Receiving full claim payment from different companies for the same vehicle or health problem.
Hiding data: A person who has been denied a claim in one company goes to another company to get new insurance and hide the old bad record.
Fake Accidents: There is no central mechanism to cross-check fake claims made by organized gangs.
Attractive on paper, zero in implementation: The Insurance Authority has been prioritizing the issue of establishing an Insurance Information Center in its policies, strategies and annual programs. Legally, this issue is also strong.
Status of Legal Basis Provision{
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The Insurance Act, 2079 has clearly provisions regarding the establishment and operation of the information centre. There is also a provision in the Insurance Regulations in this regard. The NRA has been saying that it has prepared a draft of the guideline regarding working procedure and structure for the establishment and operation of the center.
This issue has also been given high priority in the NRA’s five-year strategy.
Insurance Khabar has been drawing the attention of the regulator time and again in this regard. However, the irony is that the files are stuck in the drawers of the authority and there is no concrete progress at the implementation level.
Who’s paying the price for the delay?
The delay in setting up the Insurance Information Centre is not only affecting the insurance companies but also the overall economy and the honest insured.
When the loss ratio increases due to fraud, the burden of it is added to the premium of the honest insured. When the claim process becomes cumbersome and cases of fraud come to light, public trust in insurance decreases. In the absence of action and tracking, the gangs that make insurance a means of economic crime flourish.
The Insurance Information Centre is not just an office but it is the backbone of transparency in the insurance sector. In the absence of it, we are aiming in the dark. If the way forward is to make the insurance sector dignified and transparent, the NEA should abandon the ready-made answer that it will do it soon and move ahead with a concrete timeframe.
In the age of technology, it is too late to create a mechanism where all company data can be integrated and the track record of the insured can be viewed in a single click.
