KEY INSURANCE CHANGES ON ANVIL

New Delhi: In a move that is likely to impact insurance companies, the government may delete the provision relating to involvement of employee surveyors for settling claims. A demand to this effect has been made by the Indian Institute of Insurance Surveyors & Loss Assessors (IIISLA). The proposal is under consideration of the group of ministers (GoM) that is evaluating the Insurance Bill, and the Insurance Regulatory & Development Authority (IRDA). The government will have to either incorporate large-scale changes in section 64 UM of the Insurance Act, 1938, or delete the section altogether to implement the proposed changes. "We have made a presentation before the group of ministers and they have given a positive response to our demands," IIISLA president Mahendra J Dhruva told ET. Mr Dhruva said the institute has also got the backing of the IRDA for bringing the proposed changes in the Act. At present, insurance companies are allowed to involve their employees as surveyors or assessors for claims up to Rs 20,000 under section 64 UM of the Insurance Act. However, if the new proposal is accepted, insurance companies will have to take the service of independent loss assessors even for smaller claims. The IIISLA has also proposed more stringent penalty for defaulting insurance agencies. “In many cases, it has been found that insurance companies exceed the limit (under section 64 UM) for appointing the assessors, which is not acceptable. We have asked the Irda to take penal actions against such companies,” Mr Dhruva said. The proposed changes may be incorporated in the new Insurance Bill which is under consideration of the GoM led by external affairs minister Pranab Mukherjee. The GoM, after revising the Bill, would return it to the finance ministry. The ministry would then start the process of presenting the Bill in Parliament after incorporating the changes suggested by the GoM. IILSA is the apex institution of insurance surveyors and loss assessors promoted by the Irda on the recommendations of the Bhandari Committee, which was set up by the finance ministry in 2005. The institute has similar powers as that of the institutes of company secretaries or chartered accountants.

Source: The Economic Times