NAVIGATING INSURANCE FRAUD IN CYBERSPACE: LEGAL AND REGULATORY ISSUES IN INDIA

Abstract

Insurance fraud is not a new phenomenon in the insurance business, but the diversity of fraudulent practice it now encompasses produces adverse effects across every dimension of the sector. In the digital age, insurers rely heavily on internet-based operation to conduct business efficiently and to manage insurance risk, yet this dependence on technology exposes the sector to a distinct category of cyber risk, including data breach and cyberattack, capable of inflicting substantial financial loss on both insurer and insured. This paper examines the legal and regulatory framework governing insurance fraud in cyberspace in India, analysing the statutory foundations of insurance contract law, the evolving typology of cyber-enabled insurance fraud, and the regulatory response the Insurance Regulatory and Development Authority of India has developed through successive cybersecurity and fraud-monitoring guidelines. It argues that while India's regulatory architecture has matured considerably, from the 2017 cybersecurity guidelines through the 2023 Information and Cyber Security Guidelines to the 2025 Insurance Fraud Monitoring Framework Guidelines, this architecture remains only loosely integrated with the broader statutory framework the Digital Personal Data Protection Act, 2023 supplies, and the paper proposes closer alignment between insurance-specific regulation and general data protection law as the principal reform India's cyber-insurance governance requires.