Nepal, Feb. 10 -- In a letter to Nepal's tourism minister last month, the managing director of Traveller Assist, an Australia-based medical assistance company, threatened the government that his clients would stop issuing travel insurance policies in Nepal if the administration does not take action against trekking agencies, helicopter companies and hospitals that have been involved in fraudulent rescues.

"I am writing on behalf of our clients to submit a formal open letter that will serve as Final Notice to the Ministry for Culture, Tourism and Civil Aviation. To be clear, this is an ultimatum!" the letter from Jonathan Bancroft reads.

A similar ultimatum had been issued in August last year, in which Traveller Assist gave the governmen...