Parliament Approves Bill Imposing Penalties for Insurance Fraud

The Parliament has approved a government-sponsored bill introducing stringent penalties for insurance fraud, with fines ranging from MVR 100,000 to MVR 5 million.

The bill, put forward by Mahibadhoo MP Ahmed Toriq, received widespread support during the preliminary debate. Many lawmakers agreed on the importance of criminalising insurance fraud, although some expressed concerns that the penalties were excessive.

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The bill was passed with unanimous support from 77 members during a vote held on Monday afternoon. It has now been referred to the Public Accounts Committee for further review.

MP Toriq stated that the bill aims to establish a legal framework for licensing, regulating, and supervising insurance providers and related entities. The proposed legislation prescribes a fine of MVR 100,000 to MVR 5 million for cases involving deliberate misrepresentation of facts to claim insurance money.

Additionally, the bill includes penalties ranging from MVR 75,000 to MVR 750,000 for obstructing investigations into alleged offences and MVR 50,000 to MVR 1 million for other acts of insurance fraud not specifically outlined in the bill.

During the debate, Mathiveri MP Hassan Zareer expressed concern over the severity of the fines, noting that the insurance sector in the Maldives is still in its early stages. He suggested that the government should consider lowering the fines to encourage more companies to enter the market.

Currently, the Maldives lacks specific legislation governing the insurance sector, making this bill a significant step towards establishing regulatory oversight.