Floods 2014: HC asks Ins Cos to report on claims, disbursements

The High Court has asked four major insurance companies to submit a comprehensive report on claims received from the flood victims and the amount disbursed among them so far.

As the matter came up for hearing, a division bench of the High Court asked the insurance companies to inform the court in tabulated form about the claims received from the flood victims and the amount disbursed among them till date.

The insurance companies have also been asked to report on assessments made of the damages caused by the floods. On October 31, the Court had accepted the plea made by insurance companies that the flood affected car owners can get their vehicles repaired at any private workshop other than the authorized dealers of the car companies.

Earlier, the Court had also asked the insured parties to cooperate with the insurance companies so that they can finalize settlement of their claims. Insurance companies have also been directed to call insured parties to collect their cheques.

The court had also turned down the prayer made by insurance company Bajaj Allianz wherein it argued that it was not amenable to writ jurisdiction as it was not a State under article 12. The court had said that it can issue directions to any private party in a Public Interest Litigation.

On October 14, the Court had asked the four leading insurance companies to file a detailed compliance report with regard to the claims settled in favour of September flood victims and those under process.

The court had asked the respondent insurance companies to mention in their report as to what has been done with the claims related to cars, stocks, buildings and other infrastructure damaged by the floods.

The court also warned the insurance companies that if it fails to comply with its orders, the court will appoint a panel of two senior advocates to disburse the payments earmarked by the insurance companies for the settlement of claims. On October 10, the same division bench of the High Court had asked for the compliance reports from the respondent insurance companies.

Earlier, four leading insurance companies had approached the Supreme Court against the orders passed by High Court directing them to pay 50 percent of insured amount for policies above Rs 25 Lakh and 95 percent for policies below Rs 25 Lakh as interim relief to the flood-affected people in the state.

A bench of the apex court headed by Chief Justice H.L. Dattu has dismissed their SLP. The insurance companies have challenged High Court judgment and orders on September 26 and October 1, respectively.

“It is not only total destruction of the stock which may give cause to the insured to make a claim. The compensation may stem from many other heads like loss of earnings during the period of flood in case of shopkeepers policy and the displacement of house owner by staying inrental accommodation and hiring of vehicle in case of motor vehicle destruction,” the high court had observed.

“Therefore, the cap of 50 percent by no stretch of imagination could be recorded as excessive. Moreover, it has been made subject to an undertaking by either side to make up the deficiency at the time of final settlement,” the High Court had said while dismissing fresh plea by the four insurance companies for modification of court order passed on September 26.

The directions by the court followed perusal of compliance report by the insurance companies namely National Insurance Company, New India Assurance Company, United India Insurance Company and Oriental India Insurance Company.

The insurance companies had furnished the data regarding the settlement of claims received by them, revealing that 270 claims out of 7,966 have been settled.

As per the data furnished till ending September, the United Insurance Company received intimations regarding 2,431 claims, but it could only finalize 26 of them. It stated that cheques have been prepared but are yet to be dispersed.

Likewise, the National Insurance Company received 2,962 claims and could finalize only 85 of them, and it too had not dispersed the cheques. Oriental Insurance received 483 claims and it had settled eight of them, while New India finalized 151 out of 2090 claims received by it.

In respect of Bajaj Allianz, which has an arranged with Jammu and Kashmir Bank, the situation was no different either. As per its status report, it has received 4,870 intimations and has been able to settle only 197. Like the four companies, it is yet to make the payment.

The ICICI Lambard General Insurance Company had not even been able to finalize even a single out of 266 claims received by it. “The reports reinforce our view that dependence on preliminary survey reports is likely to take long time as has been observed in our order dated (September 26),” the court had said.

“Practically it is not possible to depute adequate number of surveyors (by insurance companies) for such a large number of claims which may take years as has already been observed in the (September 26) order,” the court had said, reiterating its order to the companies regarding policies involving Rs 25 Lakhs or less as well as above it.

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