Nagesh Kini, who was auditor of general insurance companies, believes that the Insurance Ombudsman is a great option due to low cost, simple procedures and speedy redressal, even though it may take longer than mandated
Nagesh Kini has been an auditor of general insurance companies and General Insurance Corp. He is now an activist on consumer, finance, civic and environment issues. He believes that the Insurance Ombudsman is a great option due to low cost, simple procedures and speedy redressal, even though it may take longer than mandated. Excerpts:
Moneylife (ML): We have an Ombudsman office that forms a part of the Alternative Dispute redressal (ADR) mechanism for the insurance sector, but what are the pre-requisites before approaching the Ombudsman?
Nagesh Kini (NK): All insurance companies have an in-house redressal mechanism to resolve disputes. This should ideally be the first step to resolve the issues. It is advisable to file an application first to the insurance company’s grievance cell. Though this is not a hard and fast rule. When the Ombudsman is approached directly before approaching the in-house grievance cell of the company, it may ask the policyholder to address the matter first to the redressal cell of the insurer. Other pre-requisite is that the policyholder needs to file a declaration with the Ombudsman stating that he had not filed or would withdraw any application filed before other forum or court.
ML: In what ways the Ombudsman’s office is beneficial to a policy holder? What would encourage one to approach the Ombudsman?
NK: There are several benefits to approach the Ombudsman such as…
a. There is a speedy redressal.
b. It is cost efficient, because there is no need to appoint a lawyer, no court fees etc.
c. It is less adversial because the procedure is very simple. A simple application is to be filled up which is sent to the insurer for its response. On receipt the Ombudsman can call both for a personal hearing before delivering his verdict.
ML: Is the Rs20 Lakh pecuniary jurisdiction of the Ombudsman sufficient in the present time?
NK: Keeping the inflation in mind, the pecuniary jurisdiction of the Ombudsman needs to be enhanced. Mediclaim policies that fall under the ‘personal claims’ may often exceed Rs20 lakh. Medical expenses in the operations like Cardiac and cancer have gone up substantially.
ML: Can a group insurance policy holder approach the Ombudsman’s office?
NK: Yes, though the group insurance is discounted premium as a group of people or employees are covered under the same policy, claims can be filed by an individual.
ML: Well… on paper an Ombudsman has to clear a matter/case within 90 days from the date of filing, does it reflect in practice?
NK: It seldom happens because of operational constraints like manpower, money, budget and stationery. It is not always possible for the Ombudsman to deliver his verdict within 90 days. Generally it takes more time to clear an application. In many cases, it can take six to nine months. Also there may be procedural delay like when either of the parties do not appear at hearing or delayed response from insurers or when relevant documents are not filed.
ML: Ombudsman’s jurisdiction is also limited to claims related to ‘personal lines’ aspect. But where would a policy holder go who has taken fire insurance for his business.
NK: A dividing line needs to be cleared upon this point. This is because take for e.g. a car, which is in the name of the company, but is used for personal purpose by the company official. Where would he go to claim the insurance, the Ombudsman or the Civil Court, assuming that the claim is within the pecuniary jurisdiction of the Ombudsman?
ML: What is the scope for appealing on the Ombudsman’s order?
NK: The Ombudsman’s order is binding on the insurer. The verdict is not binding on the policy holder, who can appeal the order in the Civil or the Consumer Court.
ML: Is the Ombudsman better than Consumer forum or Civil Court?
NK: Yes. Appealing to the Consumer forum or Civil Court defeats the purpose of the Ombudsman because the Ombudsman was established to save on time and cost. By going back to the Consumer forum and Civil Courts the policy holder will have to repeat all the legal formalities, like appointing lawyers.
ML: How can the appeal aspect of the Ombudsman order be made efficient than what we have discussed above?
NK: I think there should be a separate, higher mechanism at state or at the central level as an appellate body. This would obviate the need of going back to the Consumer forum or the Civil Courts.
ML: Should the pending Insurance cases in the Civil and Consumer Courts be transferred to a ‘New Insurance Judicial’ body in order to streamline the insurance cases?
NK: No. Rather the cases should be transferred to the Ombudsman because setting up a new body in the government is a big hassle. By doing so, the urge to improve the existing ombudsman office would be realized. What is advisable is to make the existing mechanism more efficient than to set up newer bodies.
ML: What would be your overall suggestions to make the present ADR mechanism of the insurance sector more efficient?
NK: Increase the pecuniary jurisdiction of the Ombudsman to at least Rs50 lakh. Improve operational constraints like manpower, office space, infrastructure and computers. On the appeal aspect, the civil and the consumer courts should be replaced by Insurance Appellate Tribunal.
Reliance started natural gas production from the KG-D6 fields in April 1, 2009, with output of about 40 mmscmd
Reliance Industries has seen gas output from its eastern offshore KG-D6 gas fields drop to a fresh all-time low of 39.80 million standard cubic metres per day.
Natural gas production from the Dhirubhai-1 and 3 gas fields and the MA oilfield in the KG-DWN-98/3, or KG-D6, block in the Krishna-Godavari Basin of the Bay of Bengal stood at 39.80 mmscmd in the week ended December 4, according to a status report filed by the company with the Oil Ministry.
The output comprised 32.94 mmscmd from the D1 and D3 gas fields and 6.86 mmscmd from the MA oilfield. The KG-D6 production is lower than 61.5 mmscmd rate achieved in March 2010, as a drop in pressure in the wells and increased water ingress has led to a lower per-well gas output. The report said of the 18 wells drilled, completed and put on production in the D1 and D3 fields, four wells--A2, B1, B2 and B13--had to be shut or closed due to high water cut/sanding issues.
The output from KG-D6 is short of the 70.39 mmscmd-level (61.88 mmscmd from D1 and D3 and 8.5 mmscmd from the MA field) envisaged by now as per the field development plan approved in 2006.
While Reliance holds 60% interest in KG-D6, UK’s BP Plc holds 30% and Niko Resources of Canada the remaining 10%. Reliance started natural gas production from the KG-D6 fields in April 1, 2009, with output of about 40 mmscmd.
The MA oilfield currently produces about 12,715 barrels of crude oil per day. In addition, 1,831 barrels of condensate are produced from the field every day. The report said 14.89 mmscmd of the gas output is being sold to fertiliser plants and 22.02 mmscmd to power plants.
The remaining 2.89 mmscmd is consumed by other sectors, including those fed by the East-West pipeline that transports gas from the East Coast to consumption centres in the West. Reliance had projected an output of 39.50 mmscmd of gas during December.
As per the status report, out of the 22 wells planned in Phase-I of D1 and D3 field development, 18 wells have been drilled and completed so far. Of these, 14 wells were put on production, while four wells were kept closed due to high water cut and sanding issues.
In the late afternoon, Reliance was trading at around Rs746 per share on the Bombay Stock Exchange, 0.58% up from the previous close.
The joint venture company will supply equipment for the 100-MW Namrup Power Station in Assam and 726-MW combined cycle power plant Palatana of ONGC Tripura Power Corporation
NTPC-BHEL Power Projects Pvt Ltd (NBPPL), a 50:50 joint venture of state-owned NTPC and BHEL for manufacturing power equipment, will start operations next fiscal, a senior company official has said.
“The infrastructure for NTPC-BHEL joint venture company would be ready by March 2012... and it would start production next year (financial year),” NTPC chairman-cum-managing director, Arup Roy Choudhury, who is also the chairman of NBPPL, told reporters on the sidelines of National Energy Conservation Day.
The company already has orders in hand, which it received from NTPC and BHEL at the time NBPPL was incorporated in April 2008. It will start manufacturing plant equipment such as transformers, switchgears, meters and automation systems from its facility in Andhra Pradesh.
NBPPL will supply equipment for the 100-MW Namrup Power Station in Assam and 726-MW combined cycle power plant Palatana of ONGC Tripura Power Corporation.
It would also take up execution of 500-MW Singrauli Thermal Power Plant and 600-MW Thermal Power Plant at Rayalseema of Andhra Pradesh Power Generation Corporation Ltd (APGENCO).
On whether the joint venture company is scouting for a technological partner, Mr Choudhury said: “Right now the focus is on starting operations... later we will see whether we need any kind of tie up with a foreign company.”
The joint venture was formed to carry out engineering, procurement and construction (EPC) contract for power plants and infrastructure projects as well as manufacture and supply of equipment. The joint venture firm falls under the administrative control of the Ministry of Heavy Industries and Public Industries.
In the late afternoon, NTPC was trading at around Rs166 per share on the Bombay Stock Exchange, 1.87% up from the previous close, while BHEL was trading at around Rs251 per share, 2.03% down from the previous close.