Parliament accepts bill prescribing MVR 5m penalty for insurance fraud

The Parliament has accepted a government bill which prescribes penalties starting from MVR 100,000 to MVR 5 million for insurance fraud.

The bill was sponsored by Mahibadhoo MP Ahmed Toriq. During the preliminary debate on the bill, many lawmakers agreed that criminalizing insurance fraud was crucial. However, some said the penalties were too steep.

The bill was accepted with an anonymous vote of 77 on Monday afternoon.

It has been sent to the Public Accounts Committee for review.

According to Toriq, the bill is designed to put a legal framework in place regarding licensing, regulating and supervising insurance providers and related parties.

The bill prescribes a fine of MVR 100,000 to MVR 5 million for deliberate misrepresentation of facts with the intent of claiming insurance money.

It also prescribes a fine of MVR 75,000 to MVR 750,000 for obstructing investigations into alleged offenses.

The bill also prescribes a fine of MVR 50,000 to MVR 1 million for acts of insurance fraud that aren’t specified in the bill.

During the preliminary debate, Mathiveri MP Hassan Zareer said he finds the fines prescribed in the bill “a bit steep”.

He said that the government must consider that the insurance sector is still in its infancy, and must encourage more companies to enter the sector.

Zareer suggested making changes, including lowering the fine amounts, during the review.

Maldives currently does not have specific legislature governing the country’s insurance sector.