Nepal cracks down on insurance fraud

The Nepalese Government is attempting to crack down on insurance fraud schemes perpetrated by powerful brokers in trekking and mountaineering in the country, which sees insurers put out of pocket for fake helicopter rescues and hospital treatments, report agencies.

A fact-finding committee recommended that, from the next tourist season, the Nepal Police should perform all rescue activities.

The committee presented these findings to Tourism Minister Rabindra Adhikari in a 700-page report.

Rescue services in France, Switzerland, Scotland and Canada were studied by the committee in order to make their recommendations.

Helicopter operators in Nepal do not usually directly conduct rescue operations, and instead ‘middlemen’ or trekking and mountaineering agencies arrange missions.

The report says that these intermediaries make fake bills and pocket a hefty commission. It found that these companies often make multiple claims for a single helicopter ride or push trekkers into unnecessary airlifts for minor illnesses and injuries.

The report suggests that the police make the arrangements to claim reimbursement for medical and helicopter costs and has pushed for the setting up of a tourist rescue coordination unit, based at Tribhuvan International Airport in Kathmandu, which will include a dedicated emergency line for injured tourists. Hospitals should also have to report the administered treatments to the Department of Tourism.

 “We are concerned by the bogus helicopter rescues and false medical insurance claims. In order to stop such offences, we have decided to entrust all tourist rescue-related tasks to the Nepal Police,” said Tourism Secretary Krishna Prasad Devkota. “We will prepare a working guideline related to the rescue operation and implement it from the autumn season.”

Earlier International insurance companies have set a Sept 1 deadline for Nepal to clamp down on fraudulent helicopter rescues of tourists or they will stop giving cover, industry sources say.

An investigation earlier this year revealed a lucrative insurance racket around pressuring hikers in the Himalayas into unnecessary rescues.

Multiple tourists are crammed into a single chopper, but each insurance company gets billed for the flight. The trekking operators, lodge owners, helicopter companies, and even hospitals pocket the extra cash.

The fraud became so acute that Nepal's government, which relies heavily on tourism, launched a probe in June in a bid to keep insurers from pulling out altogether.