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Insurance Payout Fraud Probes by IRDAI

June 24 2016
Insurance Payout Fraud Probes by IRDAI

Taking serious consideration of the allegations against General Insurance companies regarding fraud in payout of motor dealers, the Insurance Regulatory Development Authority of India (IRDAI) has set up a committee to investigate the same.

The complaint regarding the fraud and the losses suffered was filed by the Uttarakhand division of National Action Forum for Social Justice. Mr. Ajay Saxena, the Joint Secretary of the forum accused the automobile dealers and insurance brokers of creating a cartel that blackmails companies to increase their payouts.

The insurance companies were accused of giving about 50-70% of the premium from the first year as commissions because of which the small insurance companies tend to suffer from losses.

This cartel, Mr. Saxena accused, forces settlement of claims through repairs of cars in workshops and then the claim is exaggerated to gain profits.

On the basis of the complaint that was submitted on January 26th to the Prime Minister, President, Finance Minister and Chairman of the Human Rights Commission, a committee has been set up by the IRDAI to look into the matter.

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