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| Directs them to release 95 pc of insured amount when the policy value is over Rs 25 lakh | | HC passes slew of directions to insurance companies | | Early Times Report
Srinagar, Sept 26: In a major relief to businessmen badly affected by recent floods, the high court today directed insurance companies to pay 95 per cent of insured amount for policies below Rs 25 lakh and 95 per cent for above it.
"We feel that policy in respect of shopkeepers needs to be effectively implemented. Under the caption Stock Losses, it has been contemplated that cases with sum insured is upto 25 (lakhs), then after making 5% deduction towards dead or obsolete stocks is to be considered as basis for settlement," a division bench of the High Court comprising Chief Justice M M Kumar and Justice Ali Mohammad Magrey said in an 11-page judgement.
"The insured is to be given an option to accept sum insured less by 5 per cent," it said.
"In respect of the policies with sum Insured above Rs.25 lakhs, 50% of the assured amount shall released after receiving undertaking from insured and also filing of the undertaking by officer concerned of the Insurance company."
It also directed that the Insurance Company will not treat any case as partial loss merely because 5-10% of the stocks could have been salvaged whereas 90% of the same was in water.
"We feel that further categorization is required to be kept in view while implementing the policy which involves sum insured beyond Rs.25 lakhs." (One of the clauses) may not be applicable to shopkeepers who have stocks of eatables food items, cloths, shoes, readymade garments, hosiery, cosmetics and the provision stores."
It further direct that the policy decision taken by GIPSA (General Insurers'; [Public Sector] Association of India) in its meeting on September 17 should be strictly complied with by the companies associated with it.
In the meeting, it was discussed that it is social responsibility of all the insurers to settle all the claims arising out of J&K Floods/natural calamities at the earliest and they decided to relax certain norms. For the purpose of expeditious settlement of claims, they decided that Branch Manager will have the authority of scale-III and Divisional Manager that of Scale-IV.
They decided that delay in reporting of claims and submission of documents by insured for these losses shall be condoned by claim settling authorities.
In case there is situation not covered, they decided to empower Regional Incharge to take suitable decision in the spirit of special dispensation provided hereunder.
"All the Insurance companies shall hold a joint meeting with the office bearers of Kashmir Chamber of Commerce in order to reach an amicable solution of claims and the result of the meeting be placed before the court on the next date of hearing," the court said.
The directions issued, bench said, would apply to the shopkeepers who have stock of food, eatables, hosiery, shoes, chemists, cosmetics, provision stores and similar.
"The directions shall also be followed by Bajaj Alliance General insurance Company end CICI Lombard General Insurance Company."
The court also directed criminal prosecution against one who makes false claim regarding the loss.
It also requested Executive Chairperson, J&K Legal Services Authority (J&KSALSA) to meet out the grievances of the insured in tune with scheme formulated by National Legal Services Authority (NALSA) and adopted by Jammu & Kashmir State Legal Services Authority.
The division bench was hearing a petition filed by Kashmir Chamber of Commerce and Industry (KCCI). |
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