Insurers give Nepal ultimatum to end tourist rescue fraud

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

An AFP 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.

AFP has since learned an alliance of insurers from Britain, Australia and New Zealand have warned they will stop providing cover unless concrete action is taken.

Danny Kaine of Traveller Assist, a UK-based company that represents international insurers in Nepal, confirmed the deadline and said: "They are essentially trying to reduce their massive losses from the past two years."