Supreme Court tells govt to curb false insurance claims

NEW DELHI: Holding that instances of fake insurance claims have risen sharply, the Supreme Court has decided to frame guidelines to prevent filing of such "false and fabricated cases". Taking serious note of fake insurance claims, the apex court has issued notices to all states and insurance companies to suggest steps to rule out such cases.

Hearing a plea regarding false insurance claims in Uttar Pradesh earlier this month, the SC expanded the ambit and has sought response from states and other stake-holders to evolve a mechanism to curb such practice. "The situation is really alarming. Similar scenario cannot be ruled out in other states/UTs also, which is required to be looked out," a bench of Justice Arun Mishra and Justice Amitava Roy observed while hearing an appeal filed by Safiq Ahmed against an order passed by the Lucknow bench of Allahabad high court in October 2015.

The petitioner's plea for compensation was turned down by the HC as it was also found as a suspected case of fraud. The HC has set up a special investigation team (SIT) after ICICI Lombard, a private insurance firm, had filed a civil revision petition in the court against the fraud played by claimants against it. The company had submitted a list of 64 bogus pending claims filed in different tribunals across districts including in Ghaziabad, Meerut, Lucknow, Moradabad, Gorakhpur, Allahabad, Raibareli and Aligarh.

"The said list suspected fraud cases involved a cumulative claim amount of Rs 8.57 crore approximately. Out of the 64 suspected cases, 29 cases were already adjudicated by the concerned tribunals in favour of the claimants on the basis of police documents and evidence adduced by the claimants," a company spokesperson said.

The company said one such glaring example was an alleged accident involving a vehicle in May 2012, which was being driven by one Ikrar. However, in a case filed three months earlier, Ikrar was awarded compensation for amputation of his left leg below knee by the Workmen Compensation Commissioner of Ghaziabad, arising out of a road accident. The Allahabad HC in its October 2015 order had referred to the alleged pending bogus claims as "tip of iceberg".

The HC had observed, "In some cases claims have been filed under Workman Compensation Act as well as under Motor Vehicles Act. Such a loot of public money cannot be allowed to go unchecked and undetected."