Page 57 - Insurance Times August New 2023

Insurance Caselaws

CCI Closed Complaint Against IRDAI And Multiplier Method For Compensation
IIISLA, Citing Regulatory Nature of Not Restricted to Motor Accident

Functions Deaths, Also Applicable To Serious
In a significant ruling, the Competition Commission of India Injuries: Kerala High Court
(CCI) has refused to interfere in IRDAI's regulatory functions,
The Kerala High Court recently held that while computing
disposing off an information case alleging anti competitive compensation in motor accident cases, the multiplier
arrangement between insurance regulator and the Indian method proposed by the Supreme Court in Sarla Verma v.
Institute of Insurance Surveyors and Loss Assessors (IIISLA). Delhi Transport Corporation remains applicable even if the
accident resulted in serious injuries instead of death. Justice
The informant - Shrikant Ishwar Mende - was aggrieved by
C. Jayachandran clarified that the purpose of adopting the
the alleged anti-competitive arrangement between IRDAI
multiplier method was to achieve uniformity and consistency
and IIISLA , which resulted in non-renewal of his licence to
in compensation assessments, regardless of the nature of
act as Surveyor and Loss Assessor by IRDAI.
the injury.
As per the informant, IRDAI had created a statutory
"The very purpose of adopting the multiplier method in Sarla
monopoly in favour of IIISLA by mandating the membership
Verma (supra) is to do away with the considerable variation
as an eligibility criterion for grant and renewal of licenses
and inconsistency in assessing compensation and also to
and IIISLA had abused its dominant position by withholding
bring uniformity and consistency....the Honourable Supreme
the grant of membership due to non payment of past dues
Court (has) opined that following the multiplier method will
of annual subscription to IIISLA.
subserve the cause of justice, avoiding unnecessary
IIISLA is a body promoted by IRDAI in the discharge of its contentions before the Tribunals and Courts. If this be the
functions under the IRDAI Act. Membership of IIISLA was logic for adopting the multiplier method, can any change in
made mandatory by IRDAI for grant and renewal of licence the legal position be conceded for the reason that the result
for Surveyors and Loss Assessors. of the accident is an injury - especially in cases of serious
injuries - instead of a death? The answer to the above
"Such functions, being regulatory in nature, are not per se
question is surely negative, in the estimation of this Court,
amenable within the jurisdiction of the Commission as held
having regard to the logic and purpose behind adopting the
by the Hon'ble Delhi High Court in its judgement dated 2-6-
multiplier method."
2023 in the case of Institute of Chartered Accountants of
The multiplier method involves the ascertainment of the loss
India vs Competition Commission of India &ors", said a CCI
of dependency(multiplicand) and capitalizing the
order issued recently.
multiplicand by an appropriate multiplier. It involves
It maybe recalled that the Delhi High Court had last month determining the financial loss, selecting a multiplier based
ruled that regulatory powers exercised by statutory bodies on the expected duration of support, and calculating the
are not subject to competition watchdog's oversight. appropriate capital sum to cover the annual support during
that period. This ensures that the compensation adequately
Delhi High Court had highlighted that CCI's power is for
reflects the loss of dependency and is fair to the affected
regulating of markets and it does not extend to addressing
parties.
any grievance regarding arbitrary action by any statutory
authority. On the other hand, the split multiplier method is a variation

The Insurance Times August 2023 49