Probe into bogus risk claims urged

General Insurance Officers All India Association (GIOAIA) has welcomed the directive of the Madras High Court to probe the "bogus" accident insurance claims submitted before the Motor Accident Claims Tribunal (MACT).

Emphasising that the high court directive is relevant to other states as well, GIOAIA state general secretary P P Mohanan said the Kerala government should also come forward to investigate such bogus claims.

In the context of complaints by public sector general insurance companies about the bogus claims lodged with them based on 'fabricated records', the Madras High Court had recently instructed the Tamil Nadu government to form a central agency headed by the Deputy Inspector of Police, Chennai, to probe the racket.

Alleging that one of the public sector general insurance companies has incurred massive losses in Kerala in the last four years mainly due to such bogus claims in the motor insurance portfolio, Mohanan said, "For every Rs 100 premium, the insurance companies are paying Rs 150 as motor claim".

After the motor insurance premium hike in July 2002, the Kerala government had assured the insurance companies that it will set up a high power committee to look into the growing MACT cases in Kerala. But, no follow-up was done in this matter, he pointed out.

Revealing that out of total 10 lakh cases all over India, 1.5 lakh cases are in Kerala, Mohanan said, "This is a matter of concern as, despite being a comparatively smaller state, 15 per cent of the total MACT cases in the country are filed in Kerala".

Pointing out that in 2002-03 United India Insurance Company had paid Rs 67.60 crore as Motor Third Party claims in Kerala region alone, Mohanan said, "As against this, the motor insurance premium earned was only Rs 39.55 crore, resulting in a loss of Rs 28.05 crore. The same is the trend with regard to the other three public sector general insurance companies".

If the trend is not arrested the unabated filing of bogus claims before MACTs will definitely increase the burden of the public sector general insurance companies, he maintained.

Fearing huge losses in this segment, the new generation private sector insurance companies have decided not to accept the motor insurance business, Mohanan added.