Accidents victims and their families no longer need to run from pillar to post to get financial compensation. Four public sector insurance companies have come together to form a committee for out-of-court settlement of cases. It is a pilot project, and the four public players involved are United India Insurance, New India Assurance, Oriental and National Insurance.

Pending cases

It has been estimated that there are about 9 lakh cases pending at various courts relating to claims arising out of road accidents involving damage to life or limb of third parties, said Mr M. Ramdoss, Chairman and Managing Director, New India Assurance.

Mr G. Srinivasan, Chairman and Managing Director, United India Insurance, told Business Line that recently a committee was constituted in Cuttack, Orissa to provide compromise settlement for petitioners in that region. Going by the progress of this pilot project, similar committees are expected to be set up in various regions.

Any petitioner who wants a compromise settlement can approach this committee. The panel comprises a retired judge, a qualified physician and officials from the insurance companies. The settlements are faster as the petitioner is open for a compromise. Usually, such cases in courts drag on for 3-7 years before a verdict or financial compensation is awarded to the victim.

Private insurers find it easier to settle such claims by negotiating with victims or their families on the financial compensation before they go to court. Or, if they go to court, reach an out-of-court settlement.

The disadvantage facing public sector insurers is that they cannot negotiate for out-of-court settlement, as there would be various questions from the audit and vigilance departments on what basis the financial compensation was paid.

Says Mr Srinivasan, “We are positive that accident victims would approach this mechanism to get redress at the earliest.”

A General Manager (who did not want to be named) in the public sector said that in most cases the victims want compensation at the earliest. And it is the advocates who mislead them by stating that longer the delay, higher the compensation.

The move to set up the committee may come as a relief to insurers keen on controlling their losses. For some years now, the public players have been bleeding due the large claims payout on third party motor insurance.

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