Insurance fraud has emerged as a significant threat to the stability, credibility, and financial sustainability of the insurance sector in India. With rapid expansion, liberalization, and digital transformation of insurance services, fraudulent practices have become increasingly sophisticated and organized. This article examines the legal dimensions of insurance fraud in India with special reference to the state of Gujarat, where economic growth and rising insurance penetration have created both opportunities and regulatory challenges. The study analyses the statutory framework governing insurance fraud, including the Insurance Act, 1938, the Indian Penal Code, 1860, and regulatory oversight by the Insurance Regulatory and Development Authority of India. It further evaluates judicial interpretations, patterns of fraud prevalent in motor, health, life, and commercial insurance segments, and the procedural and evidentiary challenges faced in enforcement. The article also highlights preventive mechanisms such as internal governance reforms, technological interventions, inter-agency coordination, and public awareness initiatives. The findings underscore the need for a coordinated legal and regulatory response supported by advanced fraud detection systems and ethical compliance frameworks to safeguard policyholder interests and ensure long-term sectoral integrity.
Niranjan et al. (2026) studied this question.