THE EXIGENCY FOR AN INSURANCE FRAUDS CONTROL ACT IN INDIA
CHALLENGES TO BE ADDRESSED
Keywords:insurance, economic instability, pandemic, regulations
Ever since the advent of the economic reforms in 1991, the Indian insurance industry has been growing at a rapid rate, and is expected to reach an estimated value of 280 billion US dollars by the end of the current year. It has also experienced a paradigm shift from being a public sector exceptionality to an insurance industry in favor of market - oriented fair competition. Given this substantial development which has ubiquitously been sidelined by the escalating pandemic and economic instability, insurance frauds have also gained pace in our nation. These frauds not only amount to a repugnant breach of the principle of utmost good faith but also obstruct the functioning of the entire insurance industry. In the light of the above, the paper will initially examine the different circumstances under which fraud risks arise and the need of stricter legal compliance mechanisms for the same, after which it will undertake a cross-country analysis of different fraud control acts from other nations which have enforced Insurance Fraud Control Acts so as to contribute towards a more practical understanding of the same. Insurance frauds are often termed as a low-risk high reward game for criminals as there is no specific legislation in the country to control them, and the Insurance Act, 1938 which was passed during British rule to undertake the regulation of the Indian Insurance Sector, does not attenuate the issue in any way, and hence, recommendations will be made to herald the bringing about of an Insurance Frauds Control Act in our nation.