As per the data released by fraud monitoring cell of the Insurance Regulatory and Development Authority of India (IRDAI), the cases of fake motor insurance policies have more than doubled in 2019 than what it was in 2016. The data also suggested that fake policies worth more than Rs. 53 crore were sold in India during the past two years.
All these fake policies are purchased as renewal policies and contain almost similar data as that of a genuine motor insurance plan, making it difficult to distinguish it from an original policy.
While addressing the Parliament in July 2019, Finance Minister Mrs. Nirmala Sitharaman revealed that a total of 498 fake policies were sold in the year 2016-17, which rose to 823 in 2017-18, and further to 1,192 in 2018-19. Most of these fake motor insurance policies are interlinked with vehicles more than 5 years old, where the primary aim is to meet statutory compliance rather than protecting the vehicle.
As per the head of underwriting, reinsurance and claims of ICICI Lombard, Mr. Sanjay Datta, fake insurance policies are quite common in India, where fake agents use the brand name of insurance companies to mislead the customers and sell fake policies at discounted rates.
To overcome this problem, insurers have started to fix bar codes on the policy document that can be scanned to check the authenticity of the motor insurance policy. Further, some insurers have also introduced ‘3D holograms’ and are educating the police and other investigators about how to distinguish between a genuine and fake insurance policy.
*Source: Times of India
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