Srinagar: Four leading insurance companies of India have moved Supreme Court against orders by J&K High Court directing them to pay 50 percent of insured amount for policies above Rs 25 lakh and 95 percent for policies below Rs 25 lakh as interim relief to the flood-affected people in the state.
A bench of the apex court headed by Chief Justice H.L. Dattu has posted the matter on Friday “if in order in all respects.”
The insurance companies have challenged High Court judgment and orders on September 26 and October 1, respectively.
Holding that the cap of 50 percent put on by it was not excessive by any stretch of imagination, the High Court had directed the insurance companies to make the payments to the affected insured shopkeepers, house, and vehicle owners.
“It is not only total destruction of the stock which may give cause to the insured to make a claim. The compensation may stem from many other heads like loss of earnings during the period of flood in case of shopkeepers policy and the displacement of house owner by staying in rental accommodation and hiring of vehicle in case of motor vehicle destruction,” the court had observed.
“Therefore, the cap of 50 percent by no stretch of imagination could be recorded as excessive. Moreover, it has been made subject to an undertaking by either side to make up the deficiency at the time of final settlement,” the High Court had said while dismissing fresh plea by the four insurance companies for modification of court order passed on September 26.
The directions by the court followed perusal of compliance report by the insurance companies namely National Insurance Company, New India Assurance Company, United India Insurance Company and Oriental India Insurance Company.
In the report, the companies furnished the data regarding the settlement of claims received by them, revealing that 270 claims out of 7,966 have been settled.
As per the data furnished till ending September, the United Insurance Company received intimations regarding 2,431 claims, but it could only finalize 26 of them. It stated that cheques have been prepared but are yet to be dispersed.
Likewise, the National Insurance Company received 2,962 claims and could finalize only 85 of them, and it too had not dispersed the cheques. Oriental Insurance received 483 claims and it had settled eight of them, while New India finalized 151 out of 2090 claims received by it.
In respect of Bajaj Allianz, which has an arranged with Jammu and Kashmir Bank, the situation was no different either. As per its status report, it has received 4,870 intimations and has been able to settle only 197. Like the four companies, it is yet to make the payment.
The ICICI Lambard General Insurance Company had not even been able to finalize even a single out of 266 claims received by it.
“The reports reinforce our view that dependence on preliminary survey reports is likely to take long time as has been observed in our order dated (September 26),” the court had said.
In the wake of the misery created by unprecedented flood, the time was the crucial factor, the court had said.
“Practically it is not possible to depute adequate number of surveyors (by insurance companies) for such a large number of claims which may take years as has already been observed in the (September 26) order,” the court had said, reiterating its order to the companies regarding policies involving Rs 25 lakhs or less as well as above it.