Cyber insurance products in works to safeguard against online frauds

In order to adopt a unified approach to deal with the prevention of fraud in cases of online banking and transactions, and helping victims of cyber crimes, insurance products having safeguard provisions against cyber frauds are in the offing.

According to sources pricy to developments, subsequent to high-level consultations between the ministry of electronics and IT, finance and home to address related to cyber frauds, Insurance Regulatory and Development Authority (IRDA) has issued guidelines on "Product Structure for Cyber Insurance" for insurers with the objective of facilitating them in developing stand-alone cyber insurance products, specifically designed to address the evolving cyber risks.

As per the guidelines, insurers would strive to improve the development of cyber insurance market with new products and enhance benefits for policyholders, including others, sources informed further.

It has been further directed in the guidelines that considering the demand for new cyber insurance products due to the dynamic nature of cyber-attacks and novel challenges, the general insurers shall continuously endeavour to design tailor-made products referring to model policy wordings and guidance provided in the document.

Sources informed that as cyber frauds are investigated by the law enforcement agencies, which come under the Union home ministry, it was informed during consultations that in order to facilitate victims or complainants to report cyber crime complaints online, the home ministry has launched the National Cyber Crime Reporting Portal which caters to complaints pertaining to cyber crimes only.

Complaints reported on this portal are dealt by the law enforcement agencies and police based on the information available in the complaints.

In addition to this, the National Helpline and Reporting Platform provides a mechanism for persons cheated in cyber frauds to report such cases to prevent loss of their hard earned money, sources informed.

The reporting platform works with active support and cooperation from the Reserve Bank of India (RBI), major banks, payment banks, wallets and online merchants.

The facility empowers both the banks and the police, by leveraging new-age technologies for sharing online fraud related information and taking action in almost real time.

The loss of defrauded money in online cheating cases can be stopped by chasing the money trail and stopping its further flow before it is taken out of the digital ecosystem by the fraudster.

Sources said that the success of the helpline and reporting platform can be gauged from the fact that on several occasions, the cheated money has been stopped from reaching fraudsters even after it has been moved by the cheats to five different banks, to hide the trail.