General insurance cos look for cover against frauds

KOLKATA: General insurers are looking at the possibility of sharing data among themselves to control fraudulent claims. Additionally, they are trying to attain legal immunity from sharing information on fraudulent claims among themselves, as well as with other financial institutions, regulators, statutory agencies and departments.

“The General Insurance Council, a representative body of non-life insurers, has taken up the issue. It is evolving a set of guidelines that will help control fraud and fraudulent claims,” Tata AIG managing director Dalip Verma told ET.

The move assumes importance as a large number of fraudulent claims, especially in the general insurance segment, have been reported lately. A preliminary estimate puts fraud claims at 6% of the total number. “At present, there are no guidelines with regard to sharing of information among insurers on such fraudsters,” he added.

Mr Verma, in a recent article submitted to the Insurance Regulatory & Development Authority (IRDA), has mentioned certain measures that the industry has suggested to the General Insurance Council to reduce incidences of claims. “The council is working on the measures and will come out with a set of guidelines soon,” he said.

“It is desirable to have specific provisions to define and make insurance fraud a criminal offence and have a special agency to investigate and prosecute fraudsters,” Mr Verma said.

“In the interim, all insurance companies, along with IRDA, may identify places and areas which are throwing up fraud cases in large numbers, identify the types of frauds and consider requesting the police to designate police stations or create a small team of investigating officers to deal with the issue,” he said.