Govt submit new bill seeking to criminalize fraudulent insurance claims

A new piece of legislation could enforce a fine of up to MVR 5 million for fraudulently claiming insurances.

The bill, seeking to criminalize misrepresentation for insurance, was submitted to the parliament at Monday's sitting by Mahibadhoo MP Ahmed Thoriq on behalf of the state.

Thoriq said the bill envisioned a more robust regulatory mechanism for the insurance sector in the Maldives.

The introduction of procedures of licensing insurance providers and affiliated businesses and the development of a legal framework to regulate and supervise these entities are other objectives of the bill, Thoriq highlighted.

The new bill underlines liabilities, offenses, and subsequent action for offenders as well. These include;

• Order to stop specific business activities of insurance providers or affiliated companies in light of offenses/malpractice
• Rectification measures
• Ordering conditions to continue business activities
• Prohibition or limiting dividends to shareholders
• Ordering to hold financial deposits for fixed durations
• Fines not exceeding MVR 1 million
• A fine not exceeding MVR 100,000 for each day for the duration of dispute resolution or rectification of errors

Additionally, if insurance providers obstruct authorities from inspecting their premises on various allegations, they may be looking at fines between MVR 75,000 and MVR 750,000.

For offenses not stipulated in the act, the offenders may receive a fine between MVR 5,000 and MVR 1 million, depending on the severity of the offense.

Fraudulent insurance claims are occasionally reported offenses in the country, which include deliberate property damage acts to claim insurance money.