Motor pool - Claims Processing Guidelines

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Motor pool - Claims Processing Guidelines Powered By Docstoc



OBJECTIVE :            To formulate a standard process for TP Claims handling across the Industry.

Processing of a valid registered claim pertaining to policies issued on or after 01-04-2007

                                  General Consideration :
Motor Third Party Insurance is compulsory on the part of the motor vehicle owner and as insurers
we are required to cover the same. However it is well known that the sector is showing high loss
ratio for various reasons including the fact that very often large number of vehicles are uninsured
and certain classes of vehicles are overexposed to third party risks.

Normally if an accident is not traceable to the action or negligence of any other person or is due to an
act of god, the victim or his legal representatives have to absorb the loss themselves. However, the
concept of no fault liability is gaining currency. If an accident, on the other hand, is caused by the
negligence of the owner or driver of a motor vehicle, under the law of torts, the victim can have
recourse to compensation. Hence the important role of the insured motor owner and his driver,
joining with the insurer, in avoiding or lessening liability is of paramount importance. Similarly the
courts have now introduced the concept of pay and recover and in such cases the correct details of
the insured and the assets of the insured will be of great value in the recovery proceedings.

Claim Notification & Registration:
Need of the hour is to map each & every TP claim at the earliest possible & register it in the
system with appropriate reserve.

Present Situation :

1.   At present, reporting of any injury claim is based on Summons from the Court. With regard to
     the improvements it is suggested that appropriate authorities give a direction to the police
     authorities to provide immediate information of any accident, as they are supposed to file, as per
     Sec. 158 (6) of the M.V. Act, 1988, which came into force w.e.f. 14/11/1994. To file /contest
     any case pending in the Supreme Court & request the Apex Court to issue direction to Police for
     compulsory implementation of compliance of Sec. 158 (6) of MV Act 1988.

2.   Presently there are 15,794 Police Stations in India excluding the State of Jammu & Kashmir.The
     Pool Manger may create a team of 300 dedicated persons ( 50 Police Stations per person), who
     may be outsourced or in-house to collect information/papers from Police on regular basis
     depending on frequency of reporting of TP cases. The persons may collect the
     information/papers from respective Judicial Magistrate/Court where Police is require to submit
     details of investigation pertaining to crime committed in their jurisdiction. Data may be got
     collected from SP office of each District. The information may also be gathered through local
     correspondents of the local news papers.

3.   In the alternative, there should be a call center where common public/claimant/Insured can
     inform any motor vehicle accident involving bodily injuries /TP property damage. Existence of
     Call Center should be widely publicized & It may be considered to pay Rs. 200/- per accident to
     the person who first register such incident in call center & which is found genuine on
     verification. Once the system of intimation of claim in call center is stabilized the payment
     facility may be withdrawn in due course of time.

4.   Generally, most of the TP cases are arisen out of OD claims, but surveyors assessing the OD loss
     fail to inform/record injuries caused to TP. All the surveyors ( in-house or external) must be
     given proper training/instructions to make proper cause analysis of the accident & explore the
     possibilities of TP injury, if any, and they should compulsorily mention the details injuries/TP in
     their report. If the surveyors do not find ant TP loss, they must sign a declaration in the survey
     report stating that they have made the cause analysis of accident & corresponding OD loss and
     no TP injury/loss was noticed/found. One of the parameter for performance evaluation of
     surveyors must be correct and timely notification of TP claim while assessing OD loss.

5.   The persons collecting the information from Police Station/News paper/Court/surveyor & the
     call center will register the claim in system through net for further action by the claim handling

Claim Handling Offices:
     Structure of the Units: The centalised offices/cells/units should be formed in different cities to
     manage the TP claims for the Pool. There could be more than one such office in the cities where
     the number of the claims is high. Or we can have a team of officers dedicated for these kinds of
     claims. Ideally, all the cities ought to have these specialised offices/teams to handle the claims as
     per TP claims processing guidelines, but it may not be practicable to establish them
     everywhere right in the beginning. It is therefore prudent to do so in phases. This will also allow
     us an opportunity to gauge the success of the system:

          1. i] Phase I: Metro cities: It is imperative that, to start with, we should have centralized
          offices in big cities where the aggregations of the insurance companys’ offices as also the
          corresponding claims are relatively quite high.
          ii] Phase II: Other big cities and State Capitals: In the second phase we should set up these
          cells in the other cities where the number of claims reported are slightly less.
          iii] Phase III: Other places.

          2. Staffing pattern: In order to make the Pool successful and also to reduce the liabilities
          of the insurance companies it is important to have a team of good officers and other support
          staff in these offices. The insurers must therefore deploy their most efficient and competent
          officers with adequate knowledge of law and exposure of practically handling these kinds
          of cases. They should be capable of taking quick actions, proactive in approach and rational
          in taking decisions. Utilising the services of the outside specialists and agencies already
          working in this area, with proven track record, should also be considered.

3. Authority: Wherever these kinds of cells/dedicated officers are setup, they have to play
an important role in managing the claims right from their inception till the logical
conclusions. Therefore they have to be empowered with the Financial Authority to enable
them to settle majority of the cases within the limits. For claims of higher liability, say
beyond Rs. 5 lacs a committee 0f 3 officials could be constituted to examine and settle such
claims expeditiously.

4. SEGMENTATION OF CLAIMS: It was felt that the MACT cases should be
segmented on the following parameters:

Nature of claims:

   ⇒ The claims can be divided on the basis of their nature, viz death, injury and property
     damage. We can have different teams handling these claims. The expertise of
     officials in different areas will ensure deft handling of the claims. While there is
     more or less a determined formula for arriving at compensation in death cases, the
     injury cases pose a problem because of their peculiar nature. It is, therefore
     proposed as under :

   ⇒ A committee be formed comprising specialists/professionals viz. senior medical
     consultants-conversant with the assessment of injuries/disabilities, determination of
     liabilities and arriving at judicious compensation in such cases. A single committee
     can cater to more than one cell-within or outside the city. If the workload is more,
     we can form more than one committee within the city, also.

   ⇒ Instead of deputing usual investigators at the initial stages, we can utilise the
     services of doctors willing to conduct the investigations in injury/disability cases.
     This will help in detecting the exaggerated and/or fraudulent cases.


                                             SUMMN &
    ONLY                                  PETITION RECD.
   SUMMN.                                 & FILE OPENED

SAME SUMMN             YES                FILE
RECD. E’LIER                              CONNECTE

    NO                                     WHETHER POLICY

                                     NO                    YES

                          REGISTER                           REGISTER
 APPT. ADV’CT              ORPHAN                             A CLAIM
 TO COLLECT                CLAIM

                                                OWN POL.            CLAIM OF
                                                 CLAIM            OTHER DO/RO
                                                  “A”              (Send copy of
                APPOINT ADVOCATE TO                                 petition and
                FILE PETITON U/S 169(2)                           summon & ask
                OF    MV   ACT    FOR                              for Cert. Pol.
                DISCLOSING    BETTER                               Copy & 64 VB
                POL. PARTICULARS BY

                                                            ADVOCATE &

       PETITION U/S 169(2) OF MV
       ACT FOR DISCLOSING BETTER                                APPOINT
       POL. PARTICULARS BY                                    ADVOCATE &
       CLAIMANT.                                             INVESTIGATOR

POLICY                   POLICY                    OBTAIN INVT.             IF ON RECEIPT OF
PARTICULARS            PARTICULARS                  REPORT AND                 INV. REPORT
DISCLOSED BY          NOT DISCLOSED                 HIGHLIGHT               LIABILITY IS NOT
CLAIMANT                                         SPECIFIC DEFENCE
                                                                            FOUND DISPUTED
                                                  THEFEFORM FOR
                                                INCORPORATING IN                CONSIDER
                                                        W/S                   COMPROMISE
                                                                             SETTLEMENT AS
                                                                             PER GUIDELINE

    OWN                CLAIM
   POLICY                               FILE        PREPERA-TION
                    AGAINST POL.      PETITIO
   FOLLOW            OF OTHER                        OF W/S WITH
     “A”                              NS WITH                               IF INV. REPORT
                   DO/RO FOLLOW                      ALL DETAILS
                        “B”              IT                                 RECD. AFTER
                                      PRAYING                               FILING W/S
                                        FOR                                 INCORPORATING
                                      EXPUNGI                               SPECIFIC
                                      NG CO’S
                                      NAME AS                               DEFENCE IF ANY
                                      INSURER          FRAMING              HIGHLIGHTED
                                                       OF ISSUES            BY INV.

                                                 FILE APL. U/S 170 OF M V
                                                     ACT & OBTAIN
                                                    REASONED ORDER





      AWARD                      CERTIFIED COPY OF
                               WELL WITHIN LIMITTION

                          RO TO PREFER APPEAL
                          THROUGH PANEL
                          ADVOCTE WITHIN
                          LIMITATION PERIOD

                            MAKE STATUROTY DEPOSIT UY/S.
                        173(1) OF MV ACT.

                          DEPOSIT IN COMPLIANCE OF INTERIM
                        ORDER, IF ANY, WHILE OBTAINING STAY


                      IN FAVOUR OF           AGAINST THE
                        COMPANY               COMPANY

                                            OBTAIN CERT. COPY OF
                                            H.C. ORDER & MEMO OF
                   FILE APPL. BEFORE
                                            APPEAL AND SEND THE
                    H.C. FOR REFUND
                                               FILE TO HO WITH
                   OF DEPOSIT UNDER
                                            RECOMMENDATION TO
                      1 & 2 ABOVE.
                                              PREFER SLP WELL
                                            WITHIN LIMITATION

As soon as the intimation is received from –
   (a)    Directly by Insured / OD claim form.
   (b)    Claimant.
   (c)    MACT Court / Labour Court by Notice.
   (d)    Through Accident Report from Police.
   (e)    Call Centre.

The same has to be registered with relevant claim number in the system and subsequently reserve
has to be provided according to the nature of the claims.

The register should contain the following details :-
   1. Claim No.
   2. Name of the Court alongwith the Court Case No.
   3. Vehicle No. and its class.
   4. Name of the Insured.
   5. Policy No. and Address of Policy Issuing Office.
   6. Name and Address of the Claimants.
   7. Nature of Claim.
   8. Amount claimed.
   9. Reserve made.
   10. Name and Address of the Investigator.
   11. Name and Address of the Advocate.
   12. Points of Defence.
   13. Amount and date of Award.
   14. Remarks.

Object -

Estimation of future liability under Motor T.P. portfolio requires o/s provisioning for each and every
case under each and every claim, arising under any one accident. This is a sensitive exercise, as it is
the most important item affecting our Balance Sheet.

Such estimation requires a blend of both scientific & objective methodology of estimation based on
standard criteria, as also a degree of flexibility in modifying the estimates so arrived at in the light of
local Tribunal/State-wise trends of Awards in similar cases, i.e., considering similar ‘nature of loss’,
and occupational/income status of victims.

The existing Guidelines on such provisioning need enrichment in the light of subsequent legal
developments, especially recent landmark judgments of the Supreme Court., and also greater
precision, with in-built facility for modifications within specified range, to take into account local
variations, i.e. trends of Awards. Such a procedure would not only make our provisioning more

realistic, but will also minimize the scope of disputes on the same, along with simplification and
consequent reduction of time and energy currently spent on dealing with Motor T.P. cases.

We may invited advocate's opinion only if provision exceeds Rs.5 lacs.

Reserving Guidelines:
     1. Each TP claim is to be registered with the initial reserve of Rs. 2,50,000/- in case of death &
        Rs. 75,000/- in case of injuries.

     2. The reserve to be revised after receipt of investigation report & full facts of the case, as per
        guidelines given below.

     3. The reserve to be reviewed quarterly & report to be generated regarding changes in reserve
        due to quarterly review exercise. The cases having high reserve say above Rs. 10 Lakhs
        should be monitored on monthly basis

     4. There should be inbuilt provision in the system to add interest liability for the year, at the end
        of each year, in all cases pending before Court. Legal cost must also be added in the reserve.

     5. The pool Manager should create “ Premium Deficiency” reserve of 100% of Pure Premium
        income of pool for the first year of operation & 75% in second year. At the end of two years
        an acturial team should be set up to examine the data to build up an IBNR/Premium
        Deficiency model.

Frequency of Estimation and Reviews Thereof

The processing of a Motor T.P. Case can be segregated into certain distinct stages, on the basis of
receipt or procurement of specific documents/information. Like any other statistics, it is necessary to
update the estimates of reserves, case-wise at periodical intervals, at each of the said stages, based on
the following, immediately after receipt of the same:

a)      Mandatory Claim Application enclosure to the Summons. In case the enclosure is missing,
        our appointed advocate should be immediately advised to take necessary legal steps before
        the Tribunal concerned to obtain the same
b)      Policy copy, along with confirmation of compliance of Sec. 64VB, from the u/w office. This
        in turn requires sending the copy of (a) above to the u/w office, with request for necessary
        information, followed by timely reminders
c)      Investigation Report
d)      Any other subsequent information, during Trial

e)      Decision for Appeal, based on Certified copy of Judgment, legal opinion, etc. This applies           .
        separately to Appeals before the High Court and Supreme Court.
f)      Further information during hearing of the Appeal

Establishing our Liability

The following are the main parameters for deciding on whether we are at all liable to bear the burden
of compensation under a Motor T.P. Case::

a)    Existence of valid and effective cover at the time of accident
b)    Whether gratuitous passenger in ‘goods carrying vehicle’, etc.
c)    Whether involvement of insured vehicle in accident proved

Steps of Estimation

a) Apply the guidelines on ‘Basic Computation’ as given below in next part.

b) Compare with Tribunal-wise past 3-5 years’ (not just the last year’s) trend of Awards on cases
   where victims had similar nature of loss (similar % of permanent partial disability, in case of
   grievous injury), and similar occupation-income status as segregated category-wise under the
   next part below.

 (c) Modify the estimate arrived at on the basis (a) on the basis of (b).

     (d) Discuss the modified estimate as per (c) with panel advocate, and then formalize it
         through his written legal opinion. Merely inviting such opinion without prior interaction
         would not be fruitful. Cases can be discussed batch-wise with concerned advocates at agreed
         intervals (say, quarterly), to economise on time and energy.

     (e) Modify the amount computed in step (c) in the light of (d), taking into consideration the
         percentage variation between the amounts as per (c) and (d). The computed total as above is
         subject to a minimum equal to the eligible NFL compensation.

     (f) Add:

        (i) Medical Expenses: Actual incurred, as per medical bills, etc. submitted by claimant and
        verified by our investigator, taking into account amount reimbursed/reimbursable by any
        other Authority (employer or any statutory authority.)
        (ii) Advocate & Investigator’s fees
        (iii)Interest, which will be computed automatically by Genisys, on entry of the rate as
        applicable, prevailing at 9% in most Tribunals, but even up to 6% in certain Tribunals trend
        of Awards, subject to maximum of 7.5%, as per judgment of Hon'ble Supreme Court in the
        case of New India Assurance Co. Ltd. Vs. Charlie and Anr. Reported in 2005 AIR SCW
        1801 (SC), Tamil Nadu State Transport Corporation Ltd. Vs. S. Rajapriya & Ors. Reported
        in 2005 ACJ 14441 & Tamil Nadu State Road Transport Corporation Ltd. Vs. K S Bindu &
        Ors. Reported in 2006(1) TAC 1 (SC)

   Computation Guidelines (Basic)

   01. Simple (Non-grievous) Injury:

       (a) Principal Liability: Upto Rs. 10,000/-, depending on gravity/nature of   injury.

        (b) Additional: Rs. 1,000/- towards ‘Pain & Suffering’

   02. Grievous Injury

021. Permanent Total Disablement (resulting in loss of employment):

       (a) Principal Liability: Annual Income of injured/victim x Age-wise Appropriate Multiplier
           as per 2nd Schedule u/s 163A of the MV Act. The annual income to be taken for this
           purpose would vary as given hereunder, subject to a ceiling of actual income claimed.

       (b) Additional:

       (i) Pain & Suffering: In conformity with Awards on cases of similar nature of disablement,
           as per Tribunal-wise experience of the dealing office, keeping in mind the Supreme
           Court Ruling in R.D. Hattangadi Vs. Pest Control (India) Pvt. Ltd, reported in ACJ
           1993, p. 366

022. Permanent Partial Disablement, with percentage of disability specified by a doctor, as per
   document submitted from the claimant’s side:

   (a) Principal Liability: Annual Income of injured/victim x Age-wise Appropriate Multiplier as
   per 2nd Schedule u/s 163A of the MV Act x Specified Disability %. The annual income to be
   taken for this purpose would vary as given hereunder, subject to a ceiling of actual income

   (b) Additional: ‘Pain & Suffering’, as per para 021 (b) (i) above.

022A. Where Injured/Victim Had No Income Prior to Accident : Notional Income of Rs.
     15,000/- p.a., as per Supreme Court Ruling in Maju Devi & Another Vs. Musafir Paswan &
     Another, reported in 2005 ACJ, p. 99, irrespective of age of victim

022B. Where Injured/Victim Had No Stable Income prior to accident

022B-I. Skilled labourer, carpenter, mason, rickshaw-puller, and similar occupations,         as also
         professionals or businessmen who are not IT Assesses: Rs. 24,000/- p.a.

022B-II. Driver/khalasi/conductor of auto/taxi/bus/truck etc.: Rs.30,000/-

22B-III Professionals or Businessmen who are IT assesses: Average Annual Income of past 3
         financial years preceding the date of accident, as per IT Returns submitted and proved
However, “Unstable” income to be considered should be based on State-wise “Minimum
         Wages Acts” : Ros may, therefore, circulate revised limits consequent with the State
         Acts, where necessary.

022C. Where the Injured/Victim had Stable Income arising from Regular Employment prior to
      accident: Actual Income. However, the formula as per 021 (a) above shall be applicable
      only if the employee is unable to continue in service due to ‘permanent total disablement’.
      Where such continuation is not affected, only the ‘loss of earnings’ during the period of
      leave due to the disability in question would be the Basic Compensation, in lieu of Para 022

023. Fatal cases:

   (a) Principal Liability: Annual Income, determined according to income and occupational status
         as per Para022A&B above x dependency, as given hereunder x Age-wise Multiplier as
         per 2nd Schedule u/s 163A of the MV Act

   (b) Additional: As given hereunder

023A. Where the deceased is Married: Dependency = 2/3 rd.


  (i) Funeral expenses: Actual, subject to limit of Rs. 2,000/-
  (ii) Loss of Consortium: Rs. 5,000/-
  (iii) Loss of Estate: Rs. 2,500/-

023B. Where the deceased is Not Married: Dependency = ½. However, multiplier to be chosen
   according to age of claimant, and not the victim, in terms of Supreme Court Ruling in UP SRTC
   Vs. Trilok Chandra & Other, reported in ACJ, 1996, p. 831


   (iv) Funeral expenses: Actual, subject to limit of Rs. 2,000/-
   (v) Loss of Estate: Rs. 2,500/-

   This Guideline deals with cases where our liability is established, and supercedes all previous
   Guidelines, with immediate effect.

   However, this guideline will also be applicable in respect of suspected fraudulent claims.

   Provisioning on the basis of 'Summons' itself, without accompanying Claim Petition to show
   details: Mention of multiple petitioners in a 'summon' on a MACT case can safely imply claim

by multiple heirs of a deceased, while a single claimant implies the injured himself. Hence, o/s
provision of Rs. 50,000/- and Rs. 25.000/- may be made immediately, being the NFL
compensation in “death” and “injury” cases respectively, to be updated as the case proceeds.

Provisioning in Appeal Cases: Awarded amount, including accrued interest + legal and
investigating fees, through fresh Circular, only on Appeals by us, but not by claimants.

Kindly circulate the guideline to all offices under your control and ensure strict compliance
thereof with immediate effect.

1.   The investigators should be empanelled after thorough reference check & final interview by
     the committee. Complete CV should be received & kept in the file/system. An agreement
     may be signed for the clarity of job/remuneration.

2.   Each and every case to be investigated , based on merit of the case. & rotation will depend
     on past performance of the investigator

3.   In order to avoid duplicacy and also outgo of extra fees effort should be made to appoint
     only one investigator where more than one vehicle is involved in an accident.
4.   A clear brief should be given to the investigators regarding points to be investigated. A
     draft of letter to the investigator is annexed. A standard format on which the investigator
     has to submit his report is also annexed.

5.   The investigation may be carried out in two stages (a) for simple injuries (b) for grevious
     injuries and death cases.

     In case of simple injuries the investigator need not meet the claimant. He should collect the
     details of the accident from Police Station and other authorities and he should collect the
     details of the injury and treatment from the nursing home / hospital and submit his report
     immediately within 15 days. The investigator should not contact the claimant for the sake
     of giving scope for inflating the claim.

     For grevious injuries and death cases he should conduct a thorough investigation and submit
     the report within 30 days in the prescribed format.

     In case of grevious injuries and prolonged treatment it may become necessary to know the
     latest status of the claimant. Depending on the situation, the investigator may be asked to
     find out and submit the latest status, which he should give within 7 days of the deputation.

           Fees for Investigator

Sr.       Nature of Injuries / Stages                                   Amount
No.                                                                     (Rs.)
1          Simple injuries or first stage report                        1,000/- plus expenses
2          Grevious injuries / death cases                              1,500/- plus expenses
3          Status Report                                                500/-

           The expenses should be actual subject to maximum of Rs._____.
           The Competent Authority should have the discretionary power of enhancing the
           investigator’s fee depending on the nature of the case subject to a maximum of 10% of the
           scheduled fee. ( 10% more fee may be considered, if report is submitted with in 30 days.
           25% of fee to be deducted, if investigator has taken more than 90 days in submission of

           Investigations should be carried out in WC (especially to establish the employer-employee
           relationship and salary proof & age of the deceased/injured with documentary evidence)
           and TPPD cases also.

           Close Proximity cases

           The cases arising within 5 days from the inception of the policy are known as Close
           Proximity Cases.

           All Close Proximity Cases must be got investigated, a check list has to be prepared as per
           the enclosure.

           In the long run an In-house panel of Investigators may also be formed.

                                               Mode of Settlement
      Once the liability is established an all out effort must be made to settle the cases at the earliest

                             Negotiated/Compromise Settlements through
                       various fora: Documentation, Methodology, Criteria, etc.

Motor TP loss is now the most potent factor for our dismal show on the profitability front and in this
context the Alternate Redressal Forums like Lok Adalat, Conciliatory Committee , Jald Rahat
Yojana, DICC & RICC are like oasis in the desert.

As an insurer there are four basic objectives why we should lean towards Lok Adalat and other
conciliatory forums –

   1. To drastically shorten the process of litigation in order to save legal costs & interest liability
      and strike a reasonable deal on the question of quantum with the claimants, to lighten the
      burden of unexpected high awards.
   2. To reduce accumulated cases, which in effect means reduced provisions, ultimately
      reflecting favourably on our bottom-line.
   3. From the social viewpoint, to mitigate the hardship of the Claimants lost in the labyrinth of
      legal process, by offering a reasonable sum which suits both the parties.
   4. To reduce work load in the office.

Lok Adalat:

Lok Adalat is an alternative Forum where cases can be compromised by both the parties with the
intervention of the Member Judges. Every Lok Adalat organised for an area shall consist of: (a)
servicing or retired judicial official, (b) a member of the legal profession and (c) a social worker or a
person engaged in paralegal activities in the area.

The Lok Adalat shall have jurisdiction to determine and arrive at a compromise or settlement
between the parties to a dispute, in respect of any case pending before, or any matter falling within
the jurisdiction of and not brought before, any Court for which the Lok Adalat is organised.
However, Award of the Lok Adalat shall be deemed to be a decree of a Civil Court and shall be final
and binding on all the parties to the dispute and no appeal shall lie to any Court against the

By amendment No.37 of 2002, called ‘Legal Services Authorities (Amendment) Act’, which came
into force with effect from 11-6-02, permanent Lok Adalat would be established to cover ‘public
utility service’ and ‘insurance service’ in terms of the definition of Public Utility Services U/S. 22A
of the Amended Act.

Conciliatory Committee

U/S. 152 of the Motor Vehicle Act, 1988, as amended in 1994, in order to dispose of Motor TP
Claims and Claims under Jald Rahat Yojana through compromise, the concept of Conciliatory
Committee, as an alternative Forum, has been introduced. The Conciliatory Committee should
consist of Retd. High Court Judge or Retd. District Judge, Retd. Senior Insurance Executives and an
Orthopedic Surgeon .

The Conciliatory Committee would process applications for compensation as per legal advices of the
Panel Advocate and in terms of provision of the Structured Compensation U/S.163A of MV Act
1988, as amended in 1994., and would recommend to the Competent Authority for approval of the
claim. If necessary approval is obtained from the Competent Authority, a joint compromise petition,
duly signed by both the parties and their advocates, is required to be filed before the respective
MACT where the case is pending, in order to get the consent award.

Jald Rahat Yojana

Keeping in view provisions U/S. 152 of the MV Act, 1988, as amended in 1994, for settlement of TP
claims between the insurer and the insured persons, the JRY scheme had been introduced by the
General Insurance Corporation of India for settlement of non-fatal claims involving non-minor
persons, at the pre-litigation stage.

The Conciliatory Committee would process applications for claims under JRY as per legal advice of
the Panel Advocates and on the basis of opinion of an Orthopedic Surgeon, who would also be a
member of the Committee, in regard to the percentage of disability sustained by the victim /
applicant, and would recommend to the Competent Authority for approval of the claim.

Since the settlement is effected at the pre-litigation stage and without involving the Court, no
consent award is necessary.

But a disadvantage of JRY is that the claimants may again move Tribunals if they feel that the
amount passed by the Committee under JRY is inadequate. Therefore, the very purpose of avoiding
the legal procedure may be frustrated and the Company will not only have to pay the amount given
by the Committee under JRY but also satisfy the Award passed by the Tribunal. However, in order
to avoid this situation, we can take shelter under Section 22C (1) of the Legal Services Authorities
(Amendment) Act, 2002, which states that “ Any party to a dispute may, before the dispute is
brought before any Court, make an application to the Permanent Lok Adalat for the settlement of
dispute”. Therefore, if our primary liability is established through investigation, the cases may be
placed before the Permanent Lok Adalat for consent award, which shall be deemed to be a decree of
a Civil Court and shall be final and binding on all the parties to the dispute.

Divisional In-house Conciliatory Committee (DICC)/ Regional In-house Conciliatory
Committee (RICC) (In GIPSA Companies)

For hastening the process of litigation and speedy disposal of cases Divisional In-house Conciliatory
Committee (DICC) / Regional In-house Committee (RICC) had been set up in 1997 in order to
explore the possibility of settlement of Motor TP claims exclusively. The DICC shall consist of
Officer-in Charge of the Division, Officer-in-Charge of Motor claims and one other officer from
Non-Motor stream. The present revised limit of Financial Authority of DICC for Motor TP claims is
Rs. 10,00,000/-.

The RICC shall consist of Officer-in-Charge of the Region, Officer-in-Charge of Motor portfolio
and one other officer not below the rank of Deputy Manager. The present revised limit of Financial
Authority of RICC for Motor TP claims is Rs.18,00,000/-.

If cases are settled through DICC/RICC, a joint compromise petition, duly signed by both the parties
and their advocates, is required to be filed before the respective MACT, where the case is pending,
in order to get the consent award.

               Step No.1: Documents to be checked/verified for establishing liability

A)       Underwriting documents:-

1. Policy copy with endorsements, if any, covering the vehicle at the material time of accident, as
   mentioned in the claim application.
2. Compliance of Section 64VB


Underwriting Office.

B)       Vehicular Documents:-

•    Registration particulars/ RC Book
•    Route permit ( if the vehicle is commercial )
•    Driving Licence ( whether valid and effective)


     2. Owner/ Insured
     3. Police Record / Court of SDJM having jurisdiction over the area in which the accident

C)      Documents relating to police case
1. FIR/Panchnama
  Emphasis should not be given on DDR ( daily diary report) , which is an agreement entered into by
   the driver/owner and the injured persons/legal
   heirs of the deceased to avoid a criminal case, since normally the sections of Indian Penal Code
   that arise in a case of RTA are 279, 337,338 & 304A which fall under the category of cognizable
   offence and against which lodging of FIR is a must.

2. Police Report U/S. 158/6 of the MV Act, amended, w.e.f. 14-11-94.
3. Final Police Report / Chargesheet U/S. 173 Cr.p.c.


         Police Authority , Court of SDJM having jurisdiction over the area in which the accident

D)       Investigation Report (mandatory)

         Investigator to obtain the details of the following:

              1. Identification of claimant (Voter I.D. Card/ photograph duly certified by the
                 competent authority viz., Panchayat / Councillor/Local MLA/MP/Gazetted Officer)
              2. Income certificate of the victim verified from the employer, or if self-employed,
                 verification through other documents.
              3. Age proof of the injured (claimant/deceased), viz, school leaving certificate/hospital
                 record/Voter I.D.Card
              4. Details of dependents in case of death of the victim, like age, income, status and
                 relation of the dependent/claimant with the victim.
              5. The involvement of the vehicle(s) in the accident and the involvement of the claimant
                 (injured/deceased) in the said accident, to be ascertained /authenticated.
              6. Driver’s statement and owner’s statement as to the cause of accident and the nature of
                 loss sustained by the victim/claimant in detail.
              7. All the injury reports of the victims, verified from the respective hospitals/nursing
                 homes on authenticity.

E)         The Panel Doctor has to verify the following aspects.
     •   The alleged injury as narrated under the claim petition, the medical papers ( in original)
         submitted before him, and his clinical examination, all tally with respect to the nature of the
     •   The injury(ies) is/are major/minor.
     •   Whether claimant has sustained permanent total/partial disablement.
     •   The degree of disablement.
     •   Whether the medical bills submitted by the claimant have relevance with the injury treatment.
     •   Present status of the injured person.

F)        Documents relating to death
          Post-mortem report/death certificate


Police Authority, Court of SDJM having jurisdiction over the area in which the accident occurred

Step No.2

After verifying all the documents as mentioned above, if it is found that our liability is otherwise not
in dispute, the cases may be segregated in order to explore the possibility of out-of-Court settlement.

Necessary assessment of compensation should be made by keeping in mind the provisions of MV
Act, as well as the guideline to this effect, and the assessed amount be offered to the claimant by
Registered Post for his consent for compromise, under intimation to the Tribunal. If we do not
receive any response from the claimant within the specified time of 30 days, then we can
approach the Tribunal with the offer, for necessary recording by the Court that the claimant is
not entitled to any interest on the offered amount, since he failed to accept the offer of the
Insurance Companies.

If the claimant is ready to accept the offer of compromise on the assessed amount, he/she may be
requested to give his/her consent for such compromise in writing and the matter may be placed
before the foras as mentioned above, for effecting necessary compromise, or the same may be placed
before the Tribunal for a consent decree.

Contested cases before Tribunal

Empanelment of Advocates: The Advocates with proven good track record & expert in
handling of TP claims should be empanelled. The CV to be obtained & kept in record .

As soon as the summons is received the same has to be registered after verifying that the claims is
not registered earlier. The claim registered should contains the details as mentioned above while
registering intimation received from other sources.

Engage an Advocate as well as an Investigator and strict rotation should be maintained while
appointing. A draft letter of appointment of Advocate is annexed.

A letter to be addressed to the insured by R/D alongwith a claim form to get the details of accident
to his vehicle, copy of R.C. book. T.C. Book, Police papers, Driving Licence of the driver, etc. at the
time of the accident.

A letter to be addressed to the claimant to submit all the documents pertaining to his claim so as to
help in speedy disposal of the case.

•   If the claim petition does not disclose any policy particulars or the particulars as disclosed are not
    sufficient for locating the actual policy issuing office, then the advocate should be requested to
    file a petition before the MACT U/S. 169(2) of the MV Act 1988 with a prayer for disclosing
    better policy particulars by the Claimants. This petition should be supported by an affidavit.
•   If the policy particulars is clearly mentioned in the claim petition, then the underwriting office
    should be contacted immediately for policy copy and 64 VB compliance.

    As soon as it is found that the claim falls under the purview of ‘close proximity’, the necessary
    papers/documents along with the check list should be forwarded immediately to the Controlling
    Office for their examining the matter. If it is found that the coverage of insurance is in order the
    Controlling Office should immediately waive the ‘close proximity’ and intimate the same to the
    concerned underwriting office. If after examination it is found by the Controlling Office that a
    back dated cover was granted, the said fact along with the supporting document should be
    furnished immediately to the underwriting office for their taking specific defence by adducing
    documentary as well as oral evidence before the Learned Tribunal. In spite of taking specific
    defence, if we are saddled with the liability, we will have no other alternative but to deposit the
    amount of award, if the same is found otherwise in order, and carry the matter before the
    Appellate court, in view of the ruling of the Hon’ble Supreme Court in the case of National
    Insurance company Ltd. Vs. Bhagu Devi & Others reported in 2000 ACJ 1037, to decide the
    issue regarding obtaining of insurance cover fraudulently and in case Insurance Company
    succeeds it will realize the awarded amount from the insured/owner and appropriate steps should

    be taken before the Executing Court to realize/recover the awarded amount from the owner /
    insured in view of the ruling of the Hon’ble Supreme court in the case of Oriental Insurance
    company Ltd. Vs. Nanjappan reported in 2004 ACJ 721.

•   Delay caused in every step in processing the ‘close proximity’ claim should be viewed seriously
    and in appropriate case detailed enquiry should be conducted in order to fix up the responsibility
    on the erring official/officials for their lapses, apart from taking action against the erring
    employees found to be involved in granting back dated cover with the connivance of the

On receipt of the investigation report the same should be given to our dealing Advocate for
incorporating the necessary defences in our Written Statement.

•   Written Statement should strictly be based on the facts revealed through investigation as well as
    the defences, if any, available U/S. 149(2) of the MV Act. Before signing the Written Statement,
    the officer concerned should ensure that all defences are incorporated in the Written Statement at
    first instance i.e., at the Tribunal Stage otherwise we shall not be permitted to raise those defences
    at the appellate stage.

•   As per Or.VIII R 1 of the Code of Civil Procedure as amended w.e.f., 1.7.2002, the defendant
    shall, within 30 days from the date of service of summons on him, present a Written Statement of
    his defence.

    Provided that where the defendant fails to file the Written Statement within the said period of 30
    days, he shall be allowed to file the same on such other day, as may be specified by the Court,
    for reasons to be recorded in writing, but which shall not be later than 90 days from the date of
    service of summons.

    Rule 9 of the said order provides that the Court may at any time require additional Written
    Statement from any of the parties and fix a time of not more than 30 days for presenting the

    Here the role of Investigator is very vital and they should be specifically instructed to submit
    their reports well before time so as to ensure the filing of Written Statement within the time as
    stipulated under the Code of Civil procedure.

•   Where liability is found not in dispute, necessary endeavour should be made immediately in order
    to explore the possibility of outside Court settlement by placing those cases before the Lok
    Adalats, Conciliatory Forums, DICC & RICC.
•   If the vehicle in question is found to be insured at the material time of accident and also if it is
    found that there is collusion between the person making the claims and the person against whom
    the claim is made or the person against whom the claim is made has failed to contest the claim,
    then a petition to be filed before the MACT U/S. 170 of the MV Act with a prayer to contest the
    case on all or any of the grounds that are available to the person against whom the claim has been

•    Framing of issues is an important part of legal proceedings and our advocate must ensure framing
     all relevant issues before the Tribunal.
•    Necessary endeavour should be made by calling the persons through court in order to examine
     them as our witnesses for discharging our burden in order to prove our contention raised in the
     Written Statement.

•    Company’s advocate should be instructed not to seek unnecessary adjournments. In this
     connection it is pertinent to mention the provision as stated under Or. XVII R 1 which reads as

     “ The court may, if sufficient cause is shown, at any stage of the suit grant time to the parties or
     to any of them, and may from time to time adjourn the hearing of the suit for reasons to be
     recorded in writing:

     Provided that no such adjournment shall be granted more than three times to a party during
     hearing of the suit.”

     Written arguments must be filed in every case.

     Where two or more vehicles are involved in an accident, efforts should be made to have single
     investigator. If both the vehicles are in Pooled business no contest should be made. Similarly
     efforts should be made to avoid contest where one vehicle is in Pooled business and the other
     vehicles is with the insurers. If one of the vehicle is not insured or is exempt from insuring, the
     case should be contested.

    Since there is no time limit and jurisdiction restrictions for filing Motor T.P. Claims in the
    Tribunals, the same can be filed in any corner of the country irrespective of the fact as to
    where the policy issuing office is located. In such events an office of the Company (or any
    nominated office for this purpose) nearest to the place where the Tribunal in which the
    Petition is filed is located, will have to handle the MACT case on behalf of the policy issuing
    office. It therefore becomes pertinent to define the roles of underwriting and servicing office.

    The importance of Servicing Office in dealing with MAC cases, where policies pertain to
    other offices (Underwriting), has been increased immediate after the amendment of the MV
    Act, 1988 which came into force w.e.f., 14/11/1994, wherein the jurisdiction of the MACT has
    been made wider. It has been laid down U/s. 166(2) of the said Act that every application
    under sub section (1) shall be made, at the option of the claimant, either to the Claims
    Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims
    Tribunal within the local limits of whose jurisdiction the claimant resides or carries on
    business or within the local limits of whose jurisdiction the defendant resides.

Earlier, every application was required to be made to the Claims Tribunal having
jurisdiction over the area in which the accident occurred.

While appointing advocate and investigator, a letter should also be given to the Under Writing
Office, in case where policy particular is clearly mentioned in the claim application, asking them
for confirmation in regard to coverage of the offending vehicle at the material time of accident
along with a schedule copy of policy and 64 VB compliance. A copy of the claim application
along with the information in regard to O/s. provision to be maintained, since the servicing office
is more acquainted with the trend of awards, should also be furnished to the Underwriting Office
so that necessary provision could be provided by them (U/s. Office) in their books of accounts.

If any fact is revealed after investigation, carried out by an investigator appointed by servicing
office, wherefrom it appears that liability of the insurer is otherwise in dispute, the said fact should
immediately be communicated to the underwriting office for their reviewing O/s. provision

On receiving the claim petition the Underwriting Office immediately make the Servicing Office
available with a schedule copy of policy along with the compliance of Sec. 64 VB, if the vehicle in
question is found to have been insured with them at the material time of accident and accordingly
an adequate amount should be provided as O/s. provision in their books of accounts keeping in
mind the fact revealed through investigation as communicated to them by the Servicing Office.

Otherwise necessary information should immediately be furnished to the servicing office for their
taking necessary defence before the Ld. Tribunal in order to absolve the insurer from paying any
amount of compensation. The supporting documents i.e., copy of premium register etc., should
also be furnished to the servicing office for filing the same before the Ld. Tribunal with a prayer to
mark the same as Exhibit.

It is pertinent to mention that the role of underwriting office has become vital particularly in
tackling the situation arising out of double /triple filing of cases the possibility of which cannot be
ruled out in view of the amendment of the M V Act wherein the jurisdiction of MACT has been
made wider. For this purpose a particular register should be maintained by the underwriting office
and as soon as any information is received by them about double/triple filing of cases, arising out
of the same cause of action, by the same claimant, the said information should immediately be
furnished to the respective servicing offices for their taking necessary defence before the
respective Tribunals.


On receiving the information from the U/W Office in regard to non-coverage of the vehicle in
question at the material time of accident, the conducting advocate should be requested to take
specific defence immediately before the Ld. Tribunal by filing a petition to this effect and
adducing documentary as well as oral evidence so as to absolve the insurer from paying any
amount of compensation.

If any information is received from the Underwriting Office about filing multiple cases, arising out
of the same cause of action, by the same claimant, the conducting advocate should immediately be
requested to take specific defence before the Tribunal by filing a petition U/s. 170 of the Code of
Civil Procedure, 1908 with a prayer to stay of the proceedings of the case. The provision as laid
down U/s. 10 of CPC is stated below :

“Stay of suit – No Court shall proceed with the trial of any suit in which the matter in issue is also
directly and substantially in issue in a previously instituted still between the same parties, or
between parties under whom they or any of them claim litigating under the same title where such
suit is pending in the same or any other Court in India having jurisdiction to grant the relief
claimed, or in any Court beyond the limits of India established or continued by the Central
Government and having like jurisdiction, or before the Supreme Court.”

If the policy particulars are not clearly mentioned in the claim application, the conducting advocate
should be requested to file a petition, supported by an affidavit, before the Ld. Tribunal Under
Section 169(2) of the M V Act, 1988 with a prayer for disclosing better policy particulars by the
claimant. The provision as laid down U/s. 169(2) of the M V Act is stated as under :

“The Claims Tribunal shall have all the powers of a Civil court for the purpose of taking evidence
on oath and of enforcing the attendance of witnesses and of compelling the discovery and
production of documents and material objects and for such other purposes as may be prescribed;
and the Claims Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and
Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1994)”.

Thereafter if the policy particulars are disclosed by the claimant the same should be furnished to
the Underwriting Office for their doing the needful as mentioned above. If after filing the said
petition U/s. 169(2), the claimant does not furnish the policy particulars within a reasonable time,
the conducting advocate should be instructed to file a petition before the Ld. Tribunal with a prayer
to expunge the name of NIC as insurer.

As soon as it is found that the claim falls under the purview of ‘close proximity’, i.e., accident
occurred within 5 days from the issuance of the policy, the information should be furnished

immediately to the Underwriting Office for taking up the matter with their Regional Office for
doing the needful.


Immediate after receiving the information with regard to ‘close proximity’ the necessary
papers/documents along with the checklist should be forwarded immediately to the Regional
Office for their examining the matter. If it is found that the coverage of insurance is in order the
RO should immediately communicate the same to the Servicing Office for their doing the needful.

If after examination it is found by the Regional Office that a back dated cover was granted, the said
fact along with the supporting documents should be furnished immediately to the Underwriting
Office for their taking up the matter with the concerned servicing office for taking specific defence
before the Learned Tribunal.


Immediate after receiving the information along with the relevant documents from the
Underwriting Office in regard to back dated coverage of insurance, the conducting advocate
should immediately be instructed to take the appropriate defence before the Ld. Tribunal by filing
Written Statement or if the WS has already been filed an additional WS to this effect and also by
adducing documentary as well as oral evidence by examining a person from the Insurance
company as DW (Defence Witness). In spite of taking specific defence by adducing documentary
as well as oral evidence, if the insurer is saddled with the liability the insurer will have no other
alternative but to deposit the amount of award and carry the matter before the Appellate Court, in
view of the ruling of the Hon’ble Supreme Court in the case of National Insurance Co. Ltd. Vs.
Bhagu Devi and others reported in 2000 ACJ 1037, to decide the issue regarding obtaining of
insurance cover fraudulently and in case insurance company succeeds it will realize the awarded
amount from the insured. The salient point of the said ruling, as mentioned above, is reproduced
below :
“Motor Vehicles Act, 1988, sec. 173(1), second proviso – Appeal – Condonation of delay –
Sufficient cause – Delay of 47 days in filing appeal by the insurance company – Insurance
company took the plea before the Tribunal that offending vehicle was not insured on the date of
accident and its owner fraudulently obtained a backdated insurance cover with the connivance of
certain officers of the company – Tribunal framed an issue on the point but rejected the contention
– Appeal by insurance company along with application for condonation of delay – Single Judge
held that delay has not been satisfactorily explained and rejected the application and appeal – Apex
Court directed the insurance company to deposit the amount with permission to the
claimants to withdraw and appropriate the same Apex Court found that cause for delay in
filing the appeal before the High Court was sufficient and condoned the delay; case remitted to
the High Court to decide the issue regarding obtaining of insurance cover fraudulently; in
case insurance company succeeds, it will realise the awarded amount from the insured.”

 Very often it is found that the advocates for the claimants file xerox copies of the cover notes
 /policies before the Ld. Tribunal at the time of argument in a proceeding under NFL in order to
 prove that the vehicle in question was covered at the material time of accident. Since photocopy of
 a document is not sufficient to prove its genuineness, the conducting advocate should be instructed
 to raise objection in regard to the genuineness of the said document. In this connection the
 observation made by the Hon’ble Apex Court in the case of United India Insurance Company
 Limited Vs. Anbari & Ors reported in 2000 ACJ 469 may be reproduced as under : “The Tribunal
 and also the High Court has failed to appreciate that production of a photocopy was not sufficient
 to prove that the driver had a valid licence when that fact was challenged by the appellant and
 genuineness of the photocopy was not admitted by it.”

 The conducting advocate should be requested to file a petition before the Ld. Tribunal raising an
 objection in regard to the genuineness of the said Xerox copy of the cover note / policy mentioning
 in the petition the ruling of the Hon’ble Apex Court, as mentioned above, with a prayer to give
 necessary direction to the claimant to make a copy of the same available to the insurer in order to
 verify its genuineness from the office copy available in the records of the insurer if the alleged
 cover note /policy appears to have been issued from their end.

 If any payment is made for satisfaction of any award or for compliance of any interim order or
 final order passed by the Appellate Court, where appeal is preferred by NIC, the said information
 along with a copy of the approval note should be furnished to the Underwriting Office for their
 making appropriate entry in their books of accounts.


 On receiving the information in regard to any payment made by the servicing office on behalf of
 the underwriting office, it should be first entered in the books of TP Department of the
 underwriting office and then the said information should be passed on Accounts Department for
 their taking appropriate action.


The defences available to the insurer are delineated in sec. 149(2) of Motor Vehicles Act. Viz.,

a)That there has been a breach of a specific condition of the policy, being one of the following
conditions, namely :

(i) a condition excluding the use of the vehicle -
            1. for hire or reward, where the vehicle is on the date of contract of insurance a vehicle
                not covered by a permit to ply for hire or reward or

           2. for organised racing and speed testing or
           3. for a purpose not allowed by the permit under which the vehicle is used where the
              vehicle is a transport vehicle or
           4. without side car being attached where the vehicle is a Motor Cycle or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly
licenced or by any person who has been disqualified for holding or obtaining a driving licence
during the period of disqualification, or

(iii) a condition excluding liability for injury cost or contributed to by conditions of war, Civil War,
riot or civil commotion; or

b) That the policy is void on the ground that it was obtained by the non disclosure of a material fact
   or by a representation of fact which was falls in some material particular.

Now the some of the situations in which evidence needs to be let in are given below along with the
step that need to be taken respectively.

 I. In case of the Driving Licence of the driver of the Insured vehicle not being valid for the class
 of vehicle that was driven at the time of accident. The following steps need to be taken in order to
 discharge the burden of proof laid non the Insurance Company.

 a. Specific plea is to be taken in the written statement stating the Driving licence number of the
 driver, its period of validity, the Class of vehicle for which authorization had been got, the class of
 vehicle which we had insured, the policy condition on which we are relying to point out the
 violation etc.

 b. To write to concerned RTO which issued the licence enquiring whether that particular licence
 was valid to drive the particular class of vehicle which was driven on the date of accident.

 c. To arrange for the marking of Policy by an officer of the company before the MACT and for
 letting in oral evidence.

 d. To arrange for an official from the concerned RTO to depose before the MACT with records to
 prove our contention that the driving licence held by our driver was not valid for driving the
 particular class of vehicle.

 e. If in the charge sheet our driver had been charged under Section 3 of MV Act for non possession
 of driving licence to mark certified copy of the same before the MACT and to arrange for
 deposition of the investigating officer who has conducted the criminal case.

 f. If this accident had given raise to an OD claim as well and if we had repudiated the same based
 on above ground that fact also needs to be highlighted before the Tribunal.

 II. No Insurance : Here no insurance could be because of the following reasons :

         1. Dishonour of Premium cheque – the steps that are need to be taken to prove our defence
            are as follows :

             1. In case of the accident happening after the dishonouring of cheque we should take
                specific plea in the written statement to the effect that on the D.O.A. policy had been
                cancelled ‘ab initio’ and endorsement had been passed vide Endt. No.

         •   The copy of Policy which was cancelled along with endorsement copy
         •   The dishonoured instrument along with advises received from the Bank
         •   Our letter to Insured along with acknowledgement intimating the cancellation         of the
             policy ‘ab initio’
         •   The proposal form given by the insured
         •   Copy of receipt issued to the insured
         •   Extract from the premium registered for the particular month/year to prove to the court
             that particular vehicle was not insured with us on the date of accident or after it.
         •   Investigation report if it throws light on insurance effected by the vehicle owner with
             other insurance companies subsequent to the date of accident etc.

2. Insurance with another company – Our company being wrongly impleaded

a)       Take specific plea in the written statement to effect that particular vehicle was not insured
         with us in the DOA. If investigation report given particulars about insurance of the vehicle
         with the other insurance companies, to give full details of same in the written statement.

b)       Take specific plea to the effect that the other insurance company should be notified of the
         proceedings and should be impleaded immediately as a respondent.

c)     Send a letter to the policy issuing office/TP handling office of the other insurance company to
     the effect that one of their vehicles was involved in an accident for which wrongly our company
     had been impleaded as respondent and to get themselves impleaded in the same at the earliest.

ci) After getting due orders from the Tribunal our Advocate should ensure that the process of
    impleading of other insurer gets completed fully and also get further orders exonerating us from
    all liability.

3. Expiry of Insurance or during break in insurance : The steps to be taken are as follows :

         •   Take specific plea in the written statement with full details about the period of insurance
             and the date of accident.
         •   Through investigator/Police official mark certified copy of FIR to prove the date of
         •   Through an officer of the company mark copy of policy or policies during which periods
             the accident had occurred to prove our contention that on the date of accident no insurance
             was there for the particular vehicle.

       •    Mark copies of underwriting documents like proposal form, premium receipt etc.

III. Duplication of Claim : This occurs when a single claimant either files two OPs for the same
cause of action in the same court with different Advocates for the same set of injuries or death. Or
else the claimant could file OPs for the same injuries arising out of one accident in different courts.
The steps that need to be taken are

       1. If the duplicate OP is also filed in the same court/place we need to take specific plea in the
          written statements filed in both the OPs to the effect that the same petitioner is claiming
          for the same injuries arising out of one accident in the other court with full details about
          the duplicate OP.
       2. To appoint one advocate to handle both the Ops.
       3. To instruct our advocate to ensure that both the OPs are heard in the same court i.e., joint
       4. Advocate to highlight duplication before the Tribunal and get suitable orders dismissing
          either one of the Ops
       5. If the duplicate OP is filed in a court in some other town, to bring to the notice of both
          advocates the fact that duplication is there and ensure specific plea in both the written
          statement to the effect that duplication is there pending with the other court with full
          details and to request for transfer of either one of the OPs to the court of our choice.

IV.      Rival Claims : This mostly happens in death cases where on the one hand wife of the
deceased along with children lodge a claim against us and on the other parents of the deceased also
file a petition separately against us.

            1. The steps detailed about in case of duplication of claims with slight modification to
               suit the circumstances need to be taken.
            2. The Legal heir certificate should be properly scrutinized to find out whether both the
               petitioners are mentioned in it.
            3. To ensure joint trial/joint hearing of the rival OPs in order that one of them could be
               dismissed as against us

V. No negligence/Composite negligence :

       1.       Specific plea in the written statement as to how the accident had occurred along with
            details about the vehicles involved in the accident, the findings of the police vide the
            charge sheet etc. need to be taken.

       2.       To arrange to mark before the Tribunal certified copies of FIR, Charge Sheet, Sketch
            etc. to prove our contention that our vehicle driver was snot negligent at all or other
            vehicle driver was also negligent and had contributed to the accident.

       3.      To arrange for the investigating officer from the police to depose before the Tribunal
            and to mark above documents.

        4.       To arrange for driver of insured vehicle on the DOA to depose before Tribunal
             regarding negligence.

        5.       To arrange for deposition of our investigator and for marking investigation report
             with full details about where the accident had occurred, his findings regarding how the
             accident had occurred and for marking Section 161(3) Cr.PC statements given by

•   Since the time for preferring appeal is 90 days from the date of the award as per Sec. 173 of the
    MV Act, all the relevant papers including the certified copy of the award along with a format,
    Annexed, duly filled in should be sent to the RO well before time so as to enable them to take a
    decision on the matter.

     It is pertinent to mention that there is no provision of second appeal in the amended CP Code.
     The relevant Sec. 100A of the said code reads as follows:

     “ Notwithstanding anything contained in any Letters Patent for any High Court or in any other
     instrument having the force of law or in any other law for the time being in force, where any
     appeal from an original or appellate decree or order is heard and decided by a single judge or a
     High court, no further appeal shall like from the judgment and decree of such single Judge.”
     It is to be ensured that any order of the Tribunal awarding payment of a certain amount must be
     satisfied within the stipulated period, as mentioned in the order of the Tribunal in order to avoid
     any payment of interest, if the said order does not merit appeal. However, if there are justifiable
     grounds for filing an appeal, necessary endeavour should be made in preferring appeal within
     the stipulated period as mentioned in the order of the Tribunal, in spite of the fact that there is a
     time limit for filing an appeal i.e., 90 days from the date of the award as per Section 173 of the
     MV Act., in order to avoid any adverse order of the Executing Court by way of attachment of
     Bank Account/Properties of the concerned servicing Divisional Office.

•   While preferring appeal the RO shall make Statutory Deposit U/S.173(1) of MV Act or any
    Deposit in compliance of interim offer, while obtaining stay.
•   On Disposal of the Appeal, if the same is in favour of the company, the certified copy of the High
    Court order should be sent to the DO and application should be filed before High Court for refund
    of Deposit made as mentioned above.
•   However, if the appeal is decided against the company, the certified copy of the High Court order
    and the Memo of Appeal should be sent along with the case file to Head Office with Advocate’s
    opinion and recommendation to prefer Special Leave Petition before Supreme Court within
    limitation period. Award Register to be maintained.

Following documents are must in each of the TP claims lodged by the claimants :

For Injury Cases

1. Claim Petition U/S 140 of M.V. Act

2. Claim Petition U/S 166 of M.V. Act
3. All police papers as follows :

     a)   FIR copy – First Information Report to the Police
     b)   Comp “AA” Form having the details of accidental vehicles
     c)   Vehicular inspection report
     d)   Spot Panchanama
     e)   Injury Certificate – MLC case report having details of all the injuries sustained in the
          accident/ A.R. copy or wound certificate
     f)   Hospitalization papers – viz. Discharge Card, Hospital Bills, Chemist Bills with supporting
          prescriptions, Lab investigations done, if any with Bills and report, Doctor’s remark on
          disability ( permanent, partial or total), if any and the likely duration of it.
     g)   Bills supporting any other expenses claimed.
     h)   Disability Certificate having the percentage loss capacity from the appropriate medical
     i)    Tapas Tipans (Statement of Witnesses)
     j)   Charge Sheet copy.
     k)   Any other related police papers.

4. Vehicular Documents

      a) R.C. book
      b) T.C. Book
      c) Copy of the Policy
      d) MDL of the driver
5.   Age of the injured
6.   Income proof of the injured
7.    Dependency of the injured
8.   Details of the loss of income, if any
9.   Loss of leave pay with proof of it

For Death Cases

1. Claim Petition U/S 140 of M.V. Act
2. Claim Petition U/S 166 of M.V. Act
3. All police papers as follows :
   a) FIR copy – First Information Report to the Police
   b) Comp “AA” Form having the details of accidental vehicles
   c) Vehicular inspection report
   d) Spot Panchanama
   e) Inquest Panchanama
   f) Hospitalization papers if any
   g) Detailed Post Mortem Report
   h) Death Certificate
   i) Tapas Tipans (Statement of Witnesses)
   j) Charge Sheet copy.

   k) Any other related police papers.

4. Vehicular Documents
      a) R.C. book
      b) T.C. Book
      c) Copy of the Policy
      d) MDL of the driver

5. Age of the injured
6. Income proof of the injured
7. Dependency details

Each case should be treated as a separate claim in the system to avoid any confusion of one claim
and more cases. Accordingly, the financial authority should be per case basis. The concept of single
event loss as applicable to other fields of General Insurance should not be made applicable to Motor
TP claims, where it is practically not possible to adhere to this, in view of, no limitation and no
jurisdiction clause.

The schedule of Advocates Fees is annexed. The financial authority for settlement of Motor TP cases
as existing in GIPSA companies is annexed.


Losses due to fraud and exaggeration are becoming more frequent, and it is the duty of each
handling office to ensure that fraud, or loss due to fraud, whether internal or external, is discovered
in time and its recurrence prevented.

Contrary to the general feeling of helplessness in such situations, we feel that there are several legal
remedies available to us, if we are prepared to pursue a step-by-step method in attracting the
attention of the Courts, from Tribunals to the highest Courts, where necessary, based on painstaking
'discovery' of fraudulent claims through proper investigations, submitting strong documentary and
oral evidence before the Courts, and relying on various provisions of Law in respect of 'frauds'.

The guidelines given below are intended to help operating offices to be vigilant in this regard, scan
our operations for possible frauds and arrest any incipient fraud at the earliest.


Websters Dictionary defines fraud as the “Intentional perversion of truth in order to induce another
to part with something of value or to surrender a legal right,” OR, “An act of deceiving or


Section 2 (23-25) provides definition of wrongful gain, wrongful loss, 'Dishonestly' and

Section 463 of IPC: Fraud means an intention to deceive. Whether it is from any expectation of
advantage to the party himself or from ill – will towards the other is immaterial. The Section also
defines 'Forgery'.


Sub Section (2) of Section 48 of CPC provides certain instances of fraud.


Section 156 of CrPC provides that any Officer – in-charge of a police station may, without the order
of a Magistrate, investigate any cognizable case which a court having jurisdiction over the local area
within the limits of such station would have power to inquire into or try under the provisions of
Chapter XIII.

Section 102 provides the power to Police Officer to seize certain property when any offence is
committed. It also provides that a seizure memo should be prepared to be produced before the
Competent Court.

Section 464 of IPC provides for situations when a person can be said to have made a 'false

Similarly, Sec. 191 & 192 define when a person can be said to have given or fabricated false
evidence, respectively.


Section 158 (6) provides that as soon as any information regarding any accident involving death or
bodily injury to any person is recorded or report under this section is completed by a police office,
the officer in-charge of the police station shall forward a copy of the same within thirty days from
the date of recording of information or, as the case may be, on completion of such report to the
claims tribunal having jurisdiction and a copy thereof to the concerned insurer, and, where a copy is
made available to the owner, he shall also within thirty days of receipt of such report, forward the
same to such Claims Tribunal and Insurer.

Kinds of Fraud

The modus operandi of a fraud generally goes like this: On hearing of a road accident case, an
advocate immediately rushes to the accident cite. He volunteers to undertake an SOS on behalf of
the victim (s), influences the relatives of the deceased or injured, and bears the initial incidental
costs. He then arranges necessary documentation to lodge and support an MACT case, including
'Claim Application', conducts the trial on behalf of the victims' relatives, and shares the awarded
amount with the latter after the Award is satisfied by insurer.

However, there are also a significant no. of cases where an injury or death caused otherwise than by
a road accident is converted to a 'Road Traffic Accident' (RTA) case, with the connivance of the
alleged victim(s)/their advocates.

Needless to mention, other authorities and persons are also part of this racket, and help the advocates
to document and argue such fraudulent cases, including even our own internal sources.

Fraud can be classified under the following heads :

•   Substitution of vehicle, especially when the actual vehicle      involved was running without
    insurance cover at the material     time of accident
•   False implication of vehicles, especially in 'hit & run' cases
•   Substitution of Driver, especially when the actual driver involved      did not have valid DL at
    the material time of accident
•   Conversion of non-RTA cases into RTA cases
•   Addition of names of the persons not affected by the accident, either at the time of GR or while
    finalising Chargesheet
•   Inflated or bogus medical bills and bogus medical certificate

•   Filing multiple cases for the same accident, but at different   Tribunals at different places,
    either simultaneously or at different     points of time

The above also tantamount to forgery, manipulation of documents and giving/fabricating false
evidence, in terms of the various Sections of IPC, CPC and CrPC referred earlier.

Internal frauds also give birth to fraudulent MACT cases through manipulations in underwriting,
instances of which are given below:

(a) Issuing fabricated and bogus covernotes / policy document or policy Certificate.
(b) Forging a covernote or photocopy of an existing covernote by interpolation of dates/name of
insured/vehicle no.
(c) Issuance of ante-dated covernote/deposit challan/receipt by an authorized person of the
(d) Issuance of original cover note to insured without filling the time of commencement of the cover
in covernote, in order to give 'wrongful gain' to insured, but mentioning the time in the copies
submitted in the office.
(e) Misuse of pre-signed blank covernotes handed over to agents/RTA agents/Dev. Officers by
AAO(D)/Dealing Officer/In-Charge of BO or DO
(f) Acceptance of cover by authorized officer even after loss has already occurred, either knowingly
in collusion with the issuer of the cover note or due to gross negligence in failure to inspect vehicle
before coverage, etc.

(g) Ante-dating acceptance of premium in cash by back-dating the receipt of premium for the period
GENISYS allows such back-dated entry (Entries can be made/adjusted upto 6 days) or by showing
'late collection' in Late Collection Scroll, particularly pertaining to Friday evenings, while premium
is actually received on following Monday, after the intervening holidays
(h) Acceptance of premium through back-dated cheque, to adjust the premium on bogus cover.
(i) Acceptance of premium cheque, with full knowledge that it would not be honoured by the Bank
due to insufficient balance in the concerned Bank A/C of the insured


(A) At the time of underwriting, granting cover even with the knowledge that the concerned vehicle
had already met with an accident; if cover is not available, then by arranging forged cover.
(B) Furnishing wrong information to Police Authority or arranging False FIR through Police
(C) Arranging false/forged medical and hospitalization records, as also false MLCs (Medico-legal
Certificates issued by hospitals to injured victims of RTA at time of first admission for treatment)
(D) Arranging certification of non-existent Permanent Total or Partial Disablement, or exaggeration
of percentage of Permanent Partial Disablement, by a Medical Practitioner.
(E) Falsely implicating certain vehicles in fabricated RTAs, in collusion with the vehicle owners.
(F) Arranging bogus Employment Certificate, Tax Receipts, RC Books, Post-arranged Driving
Licence, Age Certificate, etc.

(G) Furnishing wrong information in the application for compensation filed in the MACT/criminal
court, in respect of dependency, occupation, income, age, injury, accident itself, etc.
(H) Staging examination-in-chief through stock witnesses in relation to the information laid down in
para G above.

(I) Collusion with the insured, sometimes in connivance with advocates of the Company.

(J) Satisfaction of Award where grounds for successful Appeal are available.


Thorough knowledge of MACT cases, Motor Vehicles Act, Criminal Major Acts,                  CPC and
documents related in connection thereto, are needed to detect fraud. Some examples are:
i)Medico-Legal Certificate (MLC) issued by the hospital where a victim is first admitted/treated, and
given to the police, gives the first and most likely the best approximation to the truth

ii)FIR gives information about the cause and nature of accident, negligence of driver of involved
vehicle, vehicle no., name of the driver, place of accident, names of the victims, name of the hospital
where the victim was first admitted, names of eye witnesses.

Iii)Accident Register also gives information on the above.

iv)Seizure Memo gives first information of the existence of policy, name of driver and also the
Driving Licence seized along with all vehicle records.

v)Panchnama/sketch of place of accident gives information about cause of accident and negligence

vi)Inquest Report gives information about the deceased person, time of accident, identification of
dead body and outer marks of injury, hurt etc.

vii)vii)Post Mortem Report gives information about time of death, age of the deceased,        cause of
accidental death.

viii)Statement of witnesses given before the Police Authority in accordance with Section 161(3) of
   CrPC gives information on persons charged in the related criminal cases , whereas in MACT
   trials stock witnesses are examined instead.

ix)Report of Motor Vehicle Inspector (MVI) informs about the damages to the vehicle, with dates of
   accident and inspection, besides information on the names of owner and driver. It can also be
   inferred from the Report whether the vehicle had any mechanical fault or not.

x)Charge sheet informs the negligence of the driver, in addition to other information like vehicle(s)
   involved, persons suffering death or injury, etc.

xi)Findings in a criminal case, such as non involvement of vehicle or non-RTA causes of

02.Perusal of above documents by the probing mind of an MACT Officer should result in
detection of frauds. In the light of the said probe, effective Investigation should be arranged
for corroboration of the vital facts as well as to dig out additional information to ascertain the
truth. For effective investigation the following norms should be followed :

(a) Investigator must visit the accident site to ascertain the details of the site/ accident/victims etc.
    This part of the investigations should preferably be conducted immediately after the information
    of accident is available through any source such as Newspaper, OD Claim Form, etc.
(b) Details of information on the victim(s) and claimant(s) should be ascertained by the investigator
    from the residence/dwelling of the victim/claimant and through their neighbours. As evidence of
    the same, he should take and submit recent photographs of these persons, as well as of the
    persons whose statements he obtains in support of the facts. Greater weight should be given to
    documentary evidence.
(c) Investigator should specifically collect the details of the offending vehicle, driver at the time of
    the accident, owner, RC particulars, and Insurance details, so that any fraud in connection with
    the same can be detected at an early stage.
(d) Investigator must bring the copy of MLC and other records of the hospital where the victim was
    reportedly admitted/treated. In addition, he should bring information about any other hospital or
    clinic situated nearer to the place of accident, along with reasons for admission to a more distant
    hospital. Copy of prescription, discharge certificate, medicine bills, etc. should be collected.
(e) Identification of fraud is made easier if effective investigation is arranged by introducing modern
    technology like videography, audiography, etc. so that a fraud is proved conclusively.
(f) Own Damage claim file should be connected with the MACT claim file for verification of facts
    and detection of early frauds.

03     Underwriting fraud can be detected at the early stage through:

i.      Investigation Report.
ii.     Seizure Memo.
Iii.    VB compliance certificate.
iv.     Copy of covernote/policy produced by the applicant in the MACT in support of the claim.
v.      Any complaint received in the office.



Cases coming within the purview of 'close proximity' cases must be reported to the Higher Office
immediately with all documents as prescribed by Head Office Circular. Investigation must be made
into the 'close proximity' angle, both w.r.t. the possibility of ante-dating of cover and post-dating of
accident date & time. If ante-dating is found, immediate departmental action (through Vigilance

Department, Competent Authority) should be initiated so that our legal stand on 'fraud' in collusion
with the employee/agent of the Company can be convincingly taken in defence before MACT.

Besides, in such cases the covernote issuance authority of the suspected employee(s) should be
withdrawn simultaneously with the referred Departmental Action.

It would be very necessary to establish the fraud at the trial level by way of deposing the
policy/cover/departmental action etc. along with other documents through the authorized officer of
the Company.


   2. FIR should be lodged before the Competent Police Authority. If the said Authority does not
      take cognizance, complaint should be preferred before the appropriate Judicial           Authority.
   3. Specific pleas on the issue should be raised in the WS itself. In later stages, it should       be
      raised through additional petitions before the MACT.
   4. Available evidence must be lead in the MACT through the documents/ investigator/
        officer of the Company, and/or voluntary witnesses. In case any document is adduced, it
      should be deposed through the person who issued the document (Such as RTA,
        appropriate authority of a hospital, etc.)
   5. False disability certificates must be challenged through our panel Orthopedic Medical
   6. If the fraud is detected after award, the matter must be agitated in the same court with a
      prayer for review of the said award in view of the ruling of the Hon’ble Supreme Court in the
      case of United India Insurance Company Limited Vs. Rajendra Singh & Others, reported in
      2000 ACJ 1032, wherein it has been held that no court or tribunal can be regarded as
      powerless to review its own order if it is convinced that the order was wrangled through fraud
      or misrepresentation of such a dimension as would affect the very basis of the claim as it
      would lead to serious miscarriage of justice.


Fraud management is an essential part of any insurance activity. Keeping a strict watch on TP
claims is even more important because of the large number of accidents and consequent
injuries that take place, the reported compassionate approach of the Courts to the plight of
victims, and the high Awards passed, often disregarding the pleas taken by the insurer. In this
environment, unless there is continuous vigilance against fraudulent practices - whether in-
house or through outside agencies - it is possible for the Company to lose heavily in motor TP
cases. The following therefore needs to be kept in mind:

            1. Fraud can arise in any part of the activity chain leading to an MACT Award, beginning at
               the level of the agent (often an RTO agent who deals almost always with Motor policies
               only, especially commercial vehicles), at the stage of issue of covernote, payment/receipt
               of premium, backdating of cover, etc., as already described earlier. Hence regular
               monitoring of the underwriting procedures is needed.
            2. At the level of claims, due diligence has to be exercised to ensure that procedures which
               are important for verifying the correctness of the claim, investigation, proper defenses,
               following of all court procedures in making payment, etc. are scrupulously followed.
            3. Care must be taken when the fraud is detected the first time, to appoint very competent
               investigators and advocates who have sufficient standing to deal with such cases. There
               should be interactive sessions with the advocates, investigators, underwriter and other
               connected persons, by the dealing MACT Officer.
            4. In cases of frauds connected with major accidents, necessary assistance may be invited
               from the 4th estate, other media, etc, whose first time reporting may be used as evidence.
            5. ROs may consider appointing selected leading investigators in each district, in
               consultation with other PSU companies, to work directly under the supervision of RO. If
               necessary, RO's panel may be utilised in complex/high value claims. They should also be
               instructed to themselves suo motto verify all accidents that are reported in the
               district/designated area, even prior to the initiation of an MACT case. If any accident is
               found to be a potential MACT case against the Company, the investigator concerned may
               immediately commence investigation in the matter under intimation to the RO as well as
               the nearest DO/BO (for information) and collect all particulars/documents/information
               from various statutory authorities, hospital, independent witnesses, etc. in the manner as
               laid down earlier. Emphasis should be given that the investigators create and maintain
               their own data bank relating to all the accidents in the vicinity, and periodically supply the
               same to the RO, with copy to the nearest DO/BO

           For this purpose, the investigator must first secure possession of a prima facie valid evidence
           of cover from an appropriate source (vehicle owner, police, etc.), to be submitted along with
           other papers after completing investigations. A reasonably just and appropriate modality for
           such proactive investigations may be consolidated by the RO based on ICCC(s) at RO/local
           DO level(s) to:

         1. avoid multiple investigations by more than one investigator, keeping in mind the need for
            equitable rotation

         2. arrive at a reasonable scale of compensations, not greater than the laid down scale for
            investigation of regular MACT cases.

         3. formulate a procedure for bearing of the compensation by the Company which prima facie
            appears to be the underwriter.

VI) Strict legal action is to be initiated against the Hospitals/stock witnesses/ Doctors     and others, if
     found involved in fraudulent activities against the Company.

VII) Advocates should be instructed to arrange Summons/ non-bailable warrants, etc. for the non
     cooperating witnesses and persons representing statutory authorities.

VIII. Such cases should not only be defended properly, but, after establishing the fraud, publicised
  through newspapers and other media/available platforms.

     IX. Initiation of criminal action is also suggested against the persons involved in the fraud, with
       the consent of the RO.

X.    Some of the judgments like M. JAYANNA VS. K. RADHA KRISHNA REDDY OF
     HYDERABAD should be distributed among all the officers and dealing advocates from the
     nodal offices.

XI.   When the role of the advocate appears to be doubtful, his misconduct must be dealt with in
  accordance with the laid down guidelines in Advocates Act.

The Table below summarises the main checkpoints where the dealing officers need to sharpen their
alertness while processing MACT cases at various stages:

In Genuine Cases                        In Fraudulent Cases                Suggested
Contents        of Supporting Facts Contents           of Supporting Facts through
Claim                Revealed by    Claim                 Revealed     by Investigators/
Application            Other        Application           Other            Advocates
                     Documents                            Documents
Names         of                        Only names of                          Correct names
Victim         &                        Victim         &                       and surnames,
Claimant                                Claimant given,                        along        with
accompanied by                          or even just                           guardian's name,
father/husband's                        Initials, without                      to be ascertained
name,       with                        surname        or
Surnames                                guardian's name

Full       postal    Address            Ascertain      full
address given:       incomple-te in     postal address
- If rural, names    one or more
                                        Investigator to
of village, taluka   respects: name
                                        try to obtain
& district           of taluka, house
                                        photograph of
                     no, Pin Code,
-If urban, House                        claimant     with
                     etc om-mitted
no & Street                             ho-me          in
name,       city,                       background. If
                                        he repeats the
district & Pin
                                        address,        it
                                        indicates he has
                                        not         made
                                        enquiries. If the
                                        address pertains
                                        to a      remote
                                        area,         ask
                                        Investigator to
                                        give a route

Complete             Incomplete         Investigator     to
address         of   address            sub-mit
accident site   is   mentioned          photographs of
mentioned,      in                      site with some
the manner      as                      identifiable struc-
above                                   ture in      back-
                                        ground,        plus
                                        state-ments      of

In Genuine Cases                      In Fraudulent Cases              Suggested
Contents      of Supporting Facts Contents         of Supporting Facts through
Claim              Revealed by    Claim               Revealed     by Investigators/
Application          Other        Application         Other            Advocates
                   Documents                          Documents
                                                                          Details of site to
                                                                          be     compared
                                                                          with de-tails as
                                                                          /Seizure Memo/
                                                                          /Media Reports

Time & date of     Time & date        Time & date of     Unusual     gap Investigator   to
ac-cident          corro-borated by   acci-dent          between times & try to ascertain
mentioned    is    FIR,     Seizure   mentioned in -     dates in Claim reasons for gap
consistent with    Memo, hospital     consistent  with   Petition & other
other documents    records,    PM,    other documents    documents

Complete Regn.     Vehicle normally     Only vehicle no     Vehicle       not   Insured to be
No & generally     fo-und seized by     mentioned,          seized, or shown    con-tacted     and
even colour of     police at accident   without any other   seized at police    his affi-davit on
vehicle     is     site,   not    the   identity mark       station,   as   a   fake     acci-dent
mentioned          police station                           vehicle        is   procured
                                                            arranged at the
                   Arrest                                                       If OD Claim
                   generally follows                                            found, same to be
                                                            No arrest           collec-ted    and
                   Motor OD claim
                   ge-nerally found                         No OD Claim         tallied with TP
                   prefer-red in u/w                                            claim details
                   office                                                       Follow-up
                                                                                actions by police
                                                                                to be checked,
                                                                                and       criminal
                                                                                records collected,
                                                                                particularly     if
                                                                                FIR is delayed,
                                                                                though        such
                                                                                delay is not by
                                                                                itself enough to
                                                                                substantiate fraud

In Genuine Cases                        In Fraudulent Cases               Suggested
Contents      of Supporting Facts Contents            of Supporting Facts through
Claim              Revealed by    Claim                  Revealed     by Investigators/
Application          Other        Application            Other            Advocates
                   Documents                             Documents

ull details of        Hospitalised on   Accident details      Generally no FIR,   To check that
cause & nature of     the      day of   sketchy. No or        only a complaint    FIR is in proper
accident              accident, as per  insufficient hos-     re- corded any      format, with Sl.
mentioned, along      FIR & MLC. Se-    pitalisation          date.               No, date, name
with                  izure Memo &      details       Only
                                                              No MLC. No          of 1st informant,
hospitalisation       Pan-chnama        vague          and                        & sign-ed by
                                                              PM Report, or
details. Complete     usually pre -     incomplete      de-                       complainant &
                                                              Report silent on
details narrated in   pared next day,   tails        given,                       collect   'Janava
                                                              whether corpse
case of collision     & PM on 2nd day   stressing                                 Joga entry' by
                                                              sent by police
between 2 or          Arrest follows.   particulars                               police
                                                              station    where
more vehicles, for    Charge-sheet      showing
                                                              FIR lodged, &       Compare
each vehicle, its                       negligence       of
                      within 90 days.                         by which officer.   accident        si-te
occupants & their                       driver of insured
                      Prosecution                             No arrest, or       distance       from
respective                              vehicle
                      usually over by 6                       reference      to   po-lice      station
                      months                                  crimi-nal case/     with time & date
                                                              name of accused.    of complaint at
                                                              FIR vague           station
                                                                                  Investigator       to
                                                                                  try to cross-check
                                                                                  de-tails           of
                                                                                  accident, acc -
                                                                                  used, etc from
                                                                                  sources. He mu-
                                                                                  st      ask       for
                                                                                  'information no'
                                                                                  & date as per
                                                                                  police records, as
                                                                                  Sec. 155 of CrPC
                                                                                  provides         that
                                                                                  even information
                                                                                  on           simple
                                                                                  injuries sh-ould
                                                                                  be recorded in a
                                                                                  Register at Police
                                                                                  Investigator       to
                                                                                  ascertain      from
                                                                                  Police      records
                                                                                  and other wit-
                                                                                  nesses full details
                                                                                  of role of each
                                                                                  vehicle            in

          In Genuine Cases                     In Fraudulent Cases               Suggested
   Contents of     Supporting Facts        Contents of        Supporting      Actions through
      Claim          Revealed by              Claim         Facts Revealed     Investigators/
   Application          Other              Application         by Other          Advocates
                      Documents                               Documents
Names         and Details supported     Names           of Facts        not   List of witnesses
details of all by police records        passen-gers not suppor-ted       by   & Charge-sheet
occupants/        like Chargesheet,     given.        Pa- Charge-sheet,       to    be   cross-
passengers        Final Report, bilty   ssengers        in but by a list of   checked      with
disclosed         & challan in case     'goods- carrying persons given by     MLC & local
                  of       passenger    vehicles' shown the police along      media reports.
                  vehicles, etc.        as       owners/ with                 Check whether
                                        representatives    Panchnama, etc.    any          -one
                                        of owners, of                         claiming to be
                                        goods, or as by-                      passenger       is
                                        standers on the                       actually driver,
                                        road                                  especially      in
                                                                              public transport
                                                                              vehicles.      For
                                                                              vehicles' check
                                                                              starting      and
                                                                              destination points
                                                                              of     passengers;
                                                                              too         many
                                                                              suggests fraud
                                                                              Match nature of
                                                                              injury with that
                                                                              of accident; take
                                                                              pan-el   doctor's
                                                                              opinion         if

Full name & Policy/Certificate/ Only name of Policy                 / Proper records to
correct address co-vernote      Insu-rance    Co. Certificate         be
of insurer given, submitted     given – usually covernote         not obtained/scrutinis
along        with               of         HO/RO. submitted           ed from police /
correct policy or               Sometimes, even                       Court /applicant
cover-note    no.               name of office/
                                                                      If document found
from      Seizure               city           not
                                                                      fabricated,      to
Memo                            mentioned.
                                                                      lodge      criminal
                                Policy        No.
                                                                      complaint against
                                fictitious, office                    claimant
                                code no. itself
                                may not exist

        In Genuine Cases                 In Fraudulent Cases              Suggested
  Contents of    Supporting Facts    Contents of     Supporting Facts      Actions
     Claim         Revealed by          Claim          Revealed by         through
  Application         Other          Application          Other         Investigators/
                   Documents                           Documents          Advocates
Correct DL no. Generally a copy No.           often Instead of DL DL verification
mentioned, with of DL is attached omitted, as also copy, Seizure List to be meticulous;
name of RTA                       the name of RTA of police given     to check time gap
                                                                      between Seizure
                                                                      List & accident
Injury/death                       No such match                      Check whether
match-es                                                              the     mentioned
appropriate                                                           IPC         section
section of IPC                                                        merely provides
                                                                      penalty;        ex,
                                                                      Section        302.
                                                                      Usually      police
                                                                      first records the
                                                                      FIR etc. in terms
                                                                      of          simple
                                                                      injuries, and only
                                                                      later u/s 304A in
                                                                      case of death

Details         of                No such details                      All      criminal
Charge-sheet or                   given; violation                     records,      viz,
Final      Report                 of         policy                    Complaint, FIR,
disclosed, against                conditions                           MLC,
at least the last                 suppressed even                      Panchnama,
item of the Claim                 driver     name,                     Janava       Joga
Application, viz,                 vehicle no. etc.                     entry, FR, etc to
“any other detail”                changed                              be com-pared
                                                                       Check whether
                                                                       vehicle      no.
                                                                       mentioned     in
                                                                       chargesheet, but
                                                                       not in FIR
                                                                       Check violation
                                                                       of          policy

        In Genuine Cases                  In Fraudulent Cases               Suggested
   Contents of     Supporting        Contents of        Supporting           Actions
     Claim       Facts Revealed         Claim         Facts Revealed         through
  Application       by Other         Application         by Other         Investigators/
                   Documents                           Documents            Advocates
If victim was                     No             such                  If          vehicle
owner or his                      indication, but it                   transferred after
dependent, it is                  is stated that                       death of owner in
mentioned                         vehicle transferred                  RTA records, ch-
                                  & pending in                         eck when endt.
                                  RTA                                  for        transfer
                                                                       If owner died,
                                                                       check    his co-
                                                                       passengers    &

Nature of injury      Supported        by   No details. No          Injury/Disability     To collect MLC
or       disability   FIR,        MLC,      mat-ch between          Cer      -tificate,   Re-port & verify
given in details,     hospital records      nature of injury &      sometimes by a        hospital records,
and it mat-ches       showing bills &       accident – what         doctor/hospital       if necessary by
the nature of         prescriptions         should resu-lt in       other than the        writing to them
accident              con-sistent with      only simple inju -      one first treating
                                                                                          Our       Medical
                      injury, X-Ray &       ry shown as grieve      the        victim,
                                                                                          expert to give
                      other diagostic/      -ous, but of        a   along with a
                                                                                          evidence        in
                      clinical reports      type which doesn't      consolidated
                                                                                          Court,        and
                                            leave      external     single         Bill
                                                                                          doctor          of
                                            body          marks     without break-up
                                                                                          claimant to be
                                            (fracture/dislocati     or     supporting
                                            on, etc.)               reports/
                                                                                          through        our
                                                                                          expert's opinion.
                                                                    Often common          Suspect medical
                                                                    hospital        or    records to be
                                                                    doctor seen to        denied        and
                                                                    issue Stereotype      burden of proof
                                                                    certificates in a     put on claimant.
                                                                    large no. of cases    Obtain       Court
                                                                    for RTA victims       Order          for
                                                                    in a locality –       victim's exami-
                                                                    no           MLC      nation by our
                                                                    produced              doctor          or
                                                                                          Medical Board,
                                                                                          if required.
                                                                                          Investigator to
                                                                                          ascertain      and
                                                                                          visit 1st & other
                                                                                          who        treated
                                                                                          victim,        and
                                                                                          verify          all
                                                                                          medical records

        In Genuine Cases                            In Fraudulent Cases                      Suggested
   Contents of   Supporting Facts               Contents of   Supporting Facts                Actions
     Claim         Revealed by                    Claim         Revealed by                   through
   Application        Other                     Application        Other                   Investigators/
                   Documents                                     Documents                   Advocates

Correct age & Authentic docu--            Wrong age & No          supporting     Check age from
Date of Birth ments submitted;            date of birth documents                any        valid
mentioned     ex,           Birth         given, to secure submitted             document,     as
              Certificate, SLC,           higher multiplier;                     mentioned in 2nd
              Service Record,             sometimes      the                     col.
              Ration       Card,          two do not tally
              Voter      Identity
              Card, Passport
Correct              Authentic            Uncertifiable
occupation           records              occu-pation like
given,        with   submitted, like      casual labourer,
details like name    'Pay Slip', letter   driver, khalasi,
of      employer,    pad of firm,         etc stated. In case
location & name      Income Tax Re-       of       'business',
of business/shop,    turn, etc.           small road-side
etc                                       or rural shop, etc
                                          shown or even
                                          firm, which can
                                          be        notarised
                                          from a back date
Correct    income Valid                   False      income Post-accident        ALL necessary
given,        with documentary            shown by:          Income       Tax    documents to be
source             evidence               (a)Mentioning an Returns, or a Re-     collected.
                   submitted                                 turn for inflated   Authenticity of
                                          occupation not
                                                             income,    given    occupation to be
                                          certifiable, or a
                                                             after depo-siting   verified         if
                                          fictitious    Co.,
                                                             some tax            Income         Tax
                                          firm or employer
                                          for a short period                     receipt, payment
                                                                                 register, etc not
                                          (b)Keeping   it                        availaible. Net,
                                          within a non-                          not         gross,
                                          taxable slab                           income to be
                                                                                 ascertained. If no
                                                                                 proof, to contest
                                                                                 for      'notional'
                                                                                 income. Family
                                                                                 pension or other
                                                                                 compensation to
                                                                                 be set off against
                                                                                 claimed 'loss of

         In Genuine Cases                   In Fraudulent Cases                Suggested
   Contents of     Supporting Facts    Contents of    Supporting Facts          Actions
     Claim           Revealed by          Claim         Revealed by             through
   Application         Other           Application         Other             Investigators/
                     Documents                           Documents             Advocates
Correct no. & full                  Only name of                           Spot verification
de    -tails   of                   one de-pendent                         required
dependents given                    shown with-out                         especially     on
                                    address or other                       ages           of
                                    details, though                        dependents     &
                                    many relatives                         parent-hood of
                                    may            be                      unmarried victim
                                    mentioned      as

It may be noted that the performance review of investigators and advocates should be based on the
extent to which they have been able to comply with the steps for effective investigation and defence
of MACT cases as per the above Guidelines.


Immediate Actions

Lastly, by way of emphasis, the following directives should be complied with immediate effect:
   All Motor TP files should be KEPT SECURE
   Motor U/W Dockets should also be kept in safe custody, under lock and key, and in an
  orderly manner, to prevent misuse and waste of time in searching for records
  Motor policies should invariably be issued the same day as receipt of premium along with
  proposal; in no case should they be kept pending for necessary entries the next day or after,
  taking advantage of the presently availaible facility of 'scrolling' in GENISYS to
  accommodate entries from a back date
  . Proposals should invariably be filled up in all respects and signed by the insured, as well as
  the concerned agent/development officer/other authorized official. If a proposal is
  incomplete in any respect, premium should not be accepted and cover should be granted
  only after receipt of fresh premium along with fully filled-up proposal
  Basic documents like copies of R.C.Book, DL, Tax Token, Pan Card/Telephone
  Bill/Electricity Bill/Any other residential proof to be collected from owner, after verifying
  originals, to be so recorded in copies by dealing/designated official
  Loading should be applied in terms of prevailing guidelines, only under approval of the
  Officer-in-charge, especially on loss-making vehicles
  Officers-in-charge must periodically (say, quarterly) meet ALL agents whose names appear
  in the office records, obtain their signatures in an appropriate Attendance Register, and
  cross-check the same, along with their photographs, as appearing in office records. Such
  meetings should record both the agent-wise marketing performance and profitability on
  each class of business, as well as on each category of vehicles

Immediately on receipt of a Summon, a letter must be issued to the owner of the involved
vehicle – both as per Claim Application and as per our policy, in case they are different – by
Registered AD, inviting their comments on the authenticity of the accident details as per the
Application. The concerned postal acknowledgment, as well as envelopes which are
returned by the postal authorities with notings on the reasons for the return, should be
preserved in the concerned claim file, with copies in a Master File. The said documents
should be utilised in our defence, whenever relevant
While handing over a copy of the Summon immediately after receipt to the advocate for
preparing WS/defence, he should also be asked to point out special points/aspects requiring
thorough investigation
Investigator must invariably ascertain and visit all hospitals/doctors consulted by a victim,
the most important being the 1st consultation, which is normally expected to give the true
picture, and obtain all relevant records and statements
Investigator must necessarily be asked to state his own conclusion/opinion/remark on the
authenticity or otherwise of the Claim at the end of his Report.