The Insurance Regulatory Authority of India (IRDA) is mandated with regulating, supervising and developing the insurance industry in India. The Authority is also mandated to protect the interests of policy holders, insurance beneficiaries and the public. This mandate is executed through a combination of legal and regulatory measures and is aimed at not only ensuring industry stability and market confidence but also spurring growth.

Fraud in the Insurance Industry:-

Despite the focus on maintaining industry stability and growth, it is also recognized that the insurance industry continues to suffer negative public perception and image. This reputational risk has been partly attributed to the effects of fraud and other malpractices afflicting the insurance industry. Insurance fraud remains a complex and most significant risk affecting operations of insurers and intermediaries. Its pervasive nature as white collar crime implies that its elimination is bound to be an odious and expensive undertaking. It is an externality to policyholders, insurance beneficiaries and the general public with its interconnectedness costing insurance consumers and the business community in Kenya millions of shillings each year in direct and indirect costs. IRA is alive to this recognition and one of the measures for mitigating the effects of insurance fraud is the establishment of an insurance fraud investigation unit. This is because insurance fraud increases the cost of doing business, places businesses at risk and is a leading cause of insurance company insolvencies. It also reduces consumers’ ability to raise their standard of living due to high cost of accessing insurance services in addition to decreasing the economic potential of the country. Whereas focus on fraud in the insurance industry has tended to expend energy and resources on claims management, it is generally recognized that fraud transcends the ambit of claims administration to involve shareholders, Boards of Directors, Management and staff. Other players in the fraud chain are policyholders, third-party claimants and professionals. Their actions of knowingly providing false, incomplete or misleading information to an insurer for purposes of defrauding often leads to cash flow problems for the affected insurance companies. The Authority therefore considers such incidences as being out rightly criminal in nature. They constitute some of the reasons that have contributed to the negative perception of the insurance industry by the public; hence the need for operationalization of an Insurance Investigations Fraud Unit.

Insurance Fraud Defined:-

Fraud is defined as willful misrepresentation of the truth with intent to deceive by one party resulting in actual or potential loss to another party. The International Association of Insurance Supervisors (IAIS) in a guidance paper on preventing, detecting and remedying fraud in insurance defines insurance fraud as an act of omission or commission intended to gain dishonest advantage for a party (fraudster) or other parties. This could be achieved, for example, by:-

  • Misappropriating assets.
  • Deliberately misrepresenting, concealing, suppressing or not disclosing material facts relevant to a financial decision, transaction or perception of an insurer’s status.
  • Abusing responsibility, a position of trust or a fiduciary responsibility.



  • Fraud claim investigations and insurance fraud investigation
  • Life insurance claim investigations
  • Accidental benefits/death claim investigations
  • Property loss claim investigations
  • Travel insurance claim investigations
  • Third-party claim investigations
  • Medical claim investigations
  • Personal claim investigations
  • Theft claim investigations
  • Subrogation and recovery investigations
  • Contestable death investigations
  • Fatal accident investigations
  • Motor vehicle crash investigation
  • Recovery of stolen vehicles
  • Insurance litigation support