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3 insurance firms owe Railways Rs 29 cr

If railway authorities are to be believed, five years of persistent efforts to recover Rs 29 crore from three insurance companies, that have been paid annual premiums to insure train passengers in case of injury or death, have failed to bear fruit.

Railway mishap victim
A must-have: Officials claim that in most cases, the condition of a railway mishap victim makes it difficult to collect every little article or belonging from the person or the accident site, like a valid pass or ticket, which is a prerequisite for making claims. File pic

Railway officials claim that it was decided to pay out compensation amounts to victims under Railway Passenger Insurance Scheme, with the intention to recover the amounts from the insurance companies later. The insurance companies claim the money cannot be released in these cases, as the policy only covers bona fide passengers and not ticketless travellers.

Railways has been pursuing the matter since 2008, and has been told by the insurance companies that some of the victims were not bonafide passengers, as they did not possess a ticket or pass at the time of accident.

According to a senior official from Central Railway (CR), in most cases the condition of a railway mishap victim makes it difficult to collect every little article or belonging from the person or the accident site, like a pass or a ticket.

Good intention
The insurance scheme was started in the railway budget of 1993-94 with the basic idea to cover passengers injured or killed in train accidents. Compensation amounts were set at between Rs 32,000 and Rs 4 lakh, depending on seriousness of injury, and, in case of death, the amount would be paid to the claimant. The scheme continued till 2007 and then the railways administration decided to pay out compensation and collect from the insurance companies later.

“Railways has already paid out compensation amounts to claimants or passengers as applicable. When we asked the insurance companies to pay the dues, they refused saying that the passengers were not bonafide,” said a senior CR official, on condition of anonymity.

Indian Railways was paying an annual premium of Rs 1,500 crore to the insurance companies and CR’s share was around Rs 500 crore per year.

“We thought that the annual premium being paid to the insurance companies was very high and decided to end the insurance scheme and began paying out compensation ourselves,” the official said.

Currently, ICICI Lombard Insurance Company, Reliance India Insurance Company and United India Insurance Company are yet to pay the railways.

The approximate amounts due are: Rs 7.68 crore, Rs 4.6 crore, and Rs 17.85 crore respectively and the cases pending are 193, 137 and 531.

Official speak
Subodh Jain, general manager, Central Railway, said, “We have worked out the liabilities towards the insurance companies and the same has been forwarded to the railway board. As per our computation, it comes to around Rs 29 crore.”

Scope of scheme
The passenger Railway Insurance Scheme of Indian railways covers railway passengers against death or injury resulting from rail accidents or untoward incidents as per the Railway Act 1989. Railway passengers holding a valid ticket, railway pass, platform ticket and railway men on duty will be covered under the scheme. Besides this, children below five years of age travelling with bonafide ticket holder, pass holders, platform ticket holders in waiting rooms, cloak rooms, booking office and railway platforms who is a victim of untoward incident at the railway station will be covered under the scheme. Compensation is paid only after a decree is awarded on a claim filed in this regard in the Railway Claims Tribunal.

The other side
Shankar Nath, head- marketing and direct, ICICI Lombard General Insurance, said, “We would like to state that under the Railway Passengers Insurance Scheme, we have paid claims of approximately Rs 44 crore till date. The total premium received under the same scheme is Rs 34 crore. We have reimbursed over Rs 11 crore to Central Railways, out of which there has been excess payment by us of Rs 3 crore. We have requested Central Railways to adjust this additional amount while reimbursing future genuine claims with valid tickets, which is a pre-requisite, and ticket-less traveller cases are outside the scope of coverage of the policy. We have intimated the same to the Chief Claims Officer of Central Railways.”

Spokesperson, Reliance General Insurance, said, “RGIC has been expeditiously paying claims to the railways, as covered under the insurance policy. During the last financial year, RGIC paid 657 claims amounting to Rs 24.15 crore. Since the claim payment is an ongoing process, depending on the time taken by the tribunal to approve claims, it is our endeavour to continue paying claims as per the contract. In some cases, the document received by us is incomplete or the claims sought are outside the insurance contract. In such cases, we seek necessary supporting documents before releasing payment. The pending cases mentioned may relate to such cases.” Meanwhile, despite several attempts to contact United India Insurance Company, the officials were unavailable for comment. 

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