Rising transactions with third parties, data privacy concerns and gaps in operational processes have augmented financial crime risks in the life insurance sector, stated EY Fraud Investigation & Dispute Services' report.
According to the report, 56% of the life insurers stated up to 30% increase in fraud over the last two years; 7% confirmed up to 50% increase.
The report noted that many life insurers were still in the process of complying with the implementation of IRDAI-mandated 'Fraud Monitoring Framework'. 1 in 3 life insurers said their organizations did not have fully established whistle-blowing mechanisms, enhanced third party due to diligence processes and robust fraud-response procedures.
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