SC Motor Accident Claims SIT: The Supreme Court has taken a very tough stand on the fraud and collusion taking place in motor accident claims across the country. Terming it as a “fraud happening on a very large scale”, the court has directed all the states and union territories of the country to immediately constitute a Special Investigation Team (SIT). Along with this, the Supreme Court has also ordered the insurance companies that wherever there is suspicion of irregularities or fraud in any claim, they should immediately hand over all those cases to the SIT of the concerned state for investigation.
‘If selected cases are sent, the top management will be punished’: Supreme Court. SC Motor Accident Claims SIT
The bench of Justice Ahsanuddin Amanullah and Justice PB Varale, in its order dated August 17, has given a strict warning to the insurance companies. The court made it clear that if the companies sent suspicious claims for investigation on their own will (in a selective manner), then the top management of the company would be held directly responsible.
This whole matter started when a dispute came before the court regarding the identity of the vehicle involved in an accident. As the hearing progressed, a whole syndicate of fraud got exposed in front of the judges. In this, an organized game was going on to grab fake insurance claims worth crores of rupees by showing the same vehicle in different accidents.
Financial burden falls on honest policyholders
Making a very important comment, the Supreme Court said that the loss of such fake claims is not limited to the balance sheets of insurance companies only. When financial losses of companies increase due to fraud, they pass the burden on common and honest consumers, due to which people have to pay higher premiums.
The court has asked the states to form SITs with adequate staff and to lay down complete procedures for speedy investigation of complaints. Apart from this, if the investigation of the SIT reveals the collusion of the insurance company’s own employees or officers or an FIR is registered against them, then the companies will also have to take departmental action against them.
Praise for UP Model: 231 FIR and 533 accused
During the hearing, the Uttar Pradesh government said that so far 2,188 complaints have been received before the SIT already constituted in the state. Of these, investigation in 1,029 cases has been completed and 231 FIRs have been registered against 533 accused. Appreciating this action of UP, the top court advised other states to implement the same model expeditiously.
Digital tracking will be done through VAHAN, SARATHI and EDAR portal.
To cut the root of the fraud, the Supreme Court has made IRDAI, Ministry of Finance, Ministry of Road Transport (MoRTH) and General Insurance Council as parties in the case. The court suggested that the Ministry’s E-Detailed Accident Report (EDAR) portal be integrated with VAHAN and SARATHI databases to detect fake claims. With this, you will be able to know in one click whether any vehicle or person has been a part of any accident or claim before.
The court has also decided that if the Motor Accident Claims Tribunal (MACT) rejects any claim as fake, the company will immediately conduct an internal investigation and send the case to the SIT. The next hearing of this big case has now been fixed for September 23.