The Nepal Insurance Authority (NIA) has initiated the process to establish the Insurance Information Center in a bid to control fraudulent activities in the insurance sector. NIA is creating a new body in line with the Credit Information Bureau (CIB) which provides credit information-related services to banks and financial institutions (BFIs). In 2019, the authority had planned for establishing the center but could not set it up since the then Insurance Act, 2049 did not envisage such a body. NIA initiated the process now as the new Insurance Act, 2079, which came into implementation last November, has envisioned the Insurance Information Center.

According to the authority, a separate procedure will also be issued for the operation of the center. A separate organization will be established to run the center.

The center will function as CIB which takes action against loan defaulters and people committing banking fraud by blacklisting them and barring them from getting loans from BFIs. NIA Executive Director Raju Raman Poudel said once the center is established, it will help to control fraud in the insurance sector. The center, according to Poudel, will blacklist insured persons and persons involved in fraud, forgery, and other crimes, and questionable insurance activities in the insurance sector. Then, the insurance companies will bring a policy of not providing more insurance services to such people. Of late, various types of fraud and criminal activities have been rising in the insurance sector. Many people have been found involved in double claims payment, rampant use of forged documents for claims, and even killing or physically harming the insured to get the money in insurance coverage. Once the center is established, it is expected to help in controlling such activities. Since the center will have information about people involved in fraudulent activities, such individuals will not be able to cheat insurance companies. The center will publish the blacklisted people, making it easier for insurance companies to screen such individuals. The insurance companies will also have to cross-check the person taking insurance services with the center to find out whether he/she has been blacklisted or not. According to the NIA, the Insurance Information Center will be established in collaboration with insurance companies. The center will be set up as a public company where insurance companies will have a stake. Currently, there are 15 life insurance companies, 14 non-life insurance companies, and 2 reinsurance companies operating in Nepal. Besides, seven microinsurance companies are also coming into operation. All these companies will be stakeholders of the center.