Irdai mulls linking insurance fraud with credit score

 As insurance frauds are increasing the Insurance Regulatory and Development Authority of India(IRDAI) is considering a proposal to make insurance frauds a parameter for calculating credit scores.

Insurance frauds have been affecting the insurers with an estimate of losses over ₹45000 crore a year. This also made insurers to increase the premiums to offset the losses.

The rationale for the move is that fear of poor credit score will make people to stand away from committing insurance frauds. A risk profile will feature an individuals previous frauds in risk.

The credit information company may have to collect information on fraudsters. The changes are to be made with an amendment to the Credit Information Companies Act,2005, Credit Information companies regulation 2006, Credit information Companies rule 2006.