Risk players seek quicker disposal of motor claims

Public sector general insurance companies are pressing hard for a quicker disposal of third party motor insurance claims, which could spell an outgo of around Rs 10,000 crore as more than 11 lakh cases are pending.

"There are about 11 lakh pending cases of motor insurance claims in four PSU general insurance companies across the country," said V Ramaswamy, chairman and managing director of National Insurance Company (NIC).

"Out of this, nearly six lakh cases are injury-related cases. We need to target these injury cases first as the settlement is much easier," he added.

As on December 31, 2007, the company has about 2.7 lakh pending cases of motor insurance claims and settled about 1.1 lakh cases last financial year, which required an outgo of Rs 2,600 crore. According to Ramaswamy, the Lok Adalats hold the key for a faster disposal of such cases.

"If Lok Adalats could be arranged regularly, then it would be extremely beneficial for both the insurance companies and the individuals," he said. Last year, NIC settled about 19,000 cases through the Lok Adalats.

"Settlement of claims through Lok Adalats are all the more better for the insurance companies as a quicker disposal of cases would mean a lesser interest outgo," said V Sekar, general manager, United Insurance Co Ltd. "We have around 2.33 lakh pending third party motor insurance claims, which could mean an outgo of around Rs 3000 crore, and a large part of which is the interest outgo, which rises with the delay of disposal," Sekar explained.

Last financial year, the company settled 17,000 cases through the Lok Adalats out of nearly 6.67 lakh claims, including other insurance covers apart from the motor.

The claim settlement ratio for the motor third party is less than 30 per cent compared to nearly 90 per cent for the non suit claims.

Sekar also said there must be a cap for the road accident casualties like the government compensation in case of the rail and air accidents. "There are no caps for the road accident casualties and this is one of the main reason of cases being dragged endlessly," he said.

Apart from slow legal procedures, poor response from the claimers' side is also another reason for slow settlements, said an official of Oriental Insurance Company.

"In the last three quarters, only 100 motor insurance cases were disposed and in most of the cases there was poor response from the claimers," he added. He claimed that in Kolkata region alone there are about 10,000 outstanding claim cases.

All the general insurance companies pressed for the need for permanent Lok Adalats at various levels, which would meet at least once a week. "The main advantage of the Lok Adalats is that once a case is settled there cannot be any further appeal from either side," said Sekhar.

But the major problem with such arrangement is the lack of awareness among the people. "At every Lok Adalat, nearly 100 cases are allotted but only 5 per cent of the claimers turns up. In most of the cases people didn't even know the dates," Sekar added.