The insurance regulator Irdai is mulling a recommendation to set up an independent investigation agency to investigate cases of insurance fraud, reported Business Standard.
This agency, if formed, shall be similar to the Serious Fraud Investigation Office (SFIO), that investigates corporate fraud and comes under the Ministry of Corporate Affairs (MCA).
The proposed agency has been recommended by a working group — constituted by Irdai and insurance councils — that had representation from both insurance regulator and industry, wrote BS.
Such an agency shall be called Insurance Fraud Investigation Agency; its creation has been recommended by amending the Insurance Act, 1938. The agency has been proposed to come under Irdai.
The insurance regulator is currently looking into the proposal, an official said.
Setting up such an agency in India can help in controlling and preventing fraud in the insurance sector. There are insurance fraud prevention agencies operating in many countries, such as the National Insurance Crime Bureau in the US, Canadian National Insurance Crime Services, and Insurance Fraud Bureau and Insurance Fraud Enforcement Department in the UK.