The Hindu Business Line : Insurers to help police tackle fake claims

THE nationalised general insurance companies are working on a proposal to provide infrastructural support to Tamil Nadu's CB-CID (Crime Branch-Criminal Investigation Department) to investigate dubious motor insurance claims.

An industry official said the State CB-CID met with insurers last week. During the meeting they had asked for support in the form of vehicles and secretarial staff to help investigation process.

The current situation involving the Tamil Nadu police has its roots in an investigation on fake claims carried out there by the nationalised companies. The companies approached the State's Home Department with a report on fake claims and asked for help to tackle the problem.

Most of the fake claims relate to commercial vehicles, said an insurance official. As nationalised insurers underwrite most of the commercial vehicles business, they plan to take the initiative to bring the industry together on the issue.

As a first step, the nationalised insurers plan to get the heads of all general insurance companies to agree to provide the police in Tamil Nadu with support in the next insurance council meeting that is organised by the industry regulator, Insurance Regulatory and Development Authority.

Though the insurers do not expect to altogether check the incidence of fake claims, they hope to discourage it. One official said this is probably the first instance when the industry has begun to cooperate to tackle the menace of fake motor insurance claims.

Motor insurance makes up about 40 per cent of the general insurance business in the country.

At a recent seminar on motor insurance in Chennai, insurers said that the business was marred by fake claims across all types of vehicles.

An official estimated that between the four nationalised insurers, about Rs 12,000 crore of motor claims are outstanding at any point in time. Officials said an accurate estimate of the extent of fake claims in Rs 12,000 crore was not possible.

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