The Insurance Regulatory and Development Authority of India (IRDA), the watchdog of Insurance sector in the country has constituted a committee to inquire into the alleged fraud in the payouts of motor dealers by the General Insurance companies.
The Uttarakhand division of National Action Forum for Social Justice had submitted a complaint on the fraud and the subsequent loss to the common public and the general insurance companies. Addressing newsmen at Press club here on Thursday, the joint secretary of the forum, Ajay Saxena said that the automobile dealers and the big insurance brokers have made cartel by means of which they are blackmailing the companies to raise their payouts.
He claimed that under pressure from these brokers and automobile dealers the insurance companies offer as much as 50 percent to 70 percent of first year’s premium as commission. Saxena alleged that the automobile dealers have taken agencies in the name of their kith and kin and earn double profits. He said that the small insurance agents are bearing the brunt of this cartel.
Saxena further claimed that in case of claim this cartel forces the customers to get their vehicles repaired in their
workshops in name of cashless claim settlement and in order to earn more profits the claim amount is exaggerated due to which the insurance companies bleed.
The forum had submitted a complaint to President, Prime Minister, Finance Minister, Chairman human right commission, Finance secretary, competition commission India and other on January 26 this year. On the basis of this complaint the IRDA has constituted a committee on the issue.
In a recent letter directed to the forum the Senior Joint Director Non life, Suresh Mathur has said that the authority would take necessary action once the report of vigilance committee is received.