Mumbai, Dec. 22
IN an unprecedented move, the Chief Justice of Maharashtra on Thursday convened a meeting of Chairmen and Managing Directors of all four PSU general insurance companies to discuss speedy settlement of cases relating to third party motor claims.
According to sources, one of the key issues discussed was the possibility of out-of-court settlement of cases of which nearly 10 lakh are pending in various courts.
The Chief Justice is understood to have requested the CMDs of insurance companies to ensure that their officers submit documents and provide other kinds of assistance for speedy disposal of the cases.
On an average, each of the four companies has around two-and-a-half lakh pending cases with respect to third party accident claims. These are cases where accident victims sue insurance companies for inadequate claim settlement.
According to industry analysts, while settlement in all other lines of business is around 95 per cent, in the case of third party motor claims, it is about 26 per cent.
The prolonged judicial process has meant that cases have dragged on for decades. The existence of a Motor Accident Claims Tribunal has also not expedited the process.
While solutions such as Lok Adalat have been suggested, no alternative has materialised till date, say insurance analysts.
The third party portfolio has also been bleeding the insurance companies.
The claims ratio in this segment is believed to be in excess of 200 per cent, since it also includes commercial vehicles.
Many of the private insurers have, in fact, stayed away from offering third party covers, especially to commercial vehicles.
The Insurance Regulatory and Development Authority recently mooted the idea of a pool for third party insurance. A `pool' is a fund created out of the commitments from insurance companies as per their individual exposure. In the case of claims, the reserves are used to make payouts.