Page 42 - Insurance Times May 2022

Total Disablement and other benefits have been help increase the level of compliance. In addition to
increased nearly by four times. that, information on status of PLI Act-insurance should
be available in the website of the respective
Way Forward: organizations handling hazardous substances.
1) To increase the quantum of Relief: Taking a cue from
the above introspection, it is of utmost importance to It has to be kept in mind that PLI Act is a piece of welfare
enhance the Relief under different contingencies of PLI legislation and its purpose is to provide prompt and adequate
Act at least AT PAR with the No Fault compensation relief to the persons suffering from such accidents.
provided under Motor Vehicles Act, 2019. Modifications of Public Liability Insurance Act, 1991 is the
2) Upward Revision of Indemnity Limit: Once the need of the hour.
quantum of Relief per person is increased, Insurance
coverage is required to be increased suitably for AOA References:
limit and AOY limit. 1. The Public Liability Insurance Act, 1991
3) Widening the Scope of the Act: The selective use of 2. The Motor Vehicles Act 1988, The Motor Vehicle
"Transportation by Vehicle" excludes transportation of (Amendment) Act, 2019 and Employee's Compensation
hazardous substances by other modes like air, railways Act, 1923, and Notification S.O. 71 (E) dated 03.01.2020
and ships. The act should include transportation by all in regard to E.C.Act, 2009.
such modes. 3. The Environment Relief Fund Scheme, 2008..
4) Ensuring Compliance: The Public Liability Insurance Act 4. Research work: "The Management of Environment Relief
administered by the Ministry of Environment, Forest and Fund, March 2020 by Debadityo Sinha.
Climate Change (MoEFCC) would monitor and ensure 5. Article: India: Workplace Safety & Public Liability
that Industries handling hazardous substances purchase Insurance Act- A Ready Reckoner with Special ESG
this insurance. Creating digital awareness campaign Insights by Sonal Verma and Fauzia Khan.

Banks Violate IRDAI norms, sell insurance policies above Rs. 5 cr,

claim brokers
Insurance brokers have come out towards the apply of banks soliciting insurance policies for sums assured of above Rs
5 crore, violating the rules issued by the insurance regulator. Banks, which work as company brokers of insurance
firms, are allowed to solicit insurance cowl just for policies the place sum assured is just not greater than Rs 5 crore
per coverage as per the Insurance Regulatory and Development Authority of India’s (Irdai’s) company agent laws.
“However, we observe that banks are not following these regulations of the Irdai and sell policies for Rs 100 crore and
Rs 1,000 crore… even Rs 2,000 crore,” stated Sohanlal Kadel, managing director, Kadel Insurance Brokers.
According to the Insurance Brokers Association of India (IBAI), banks as lenders and sellers of insurance needs to be
ideally stored at arm’s size. This is important to make sure that the belongings which can be hypothecated to the
financial institution are correctly insured with optimum protection, counting on the recommendation of full-time
insurance professionals. The mixing of the 2 capabilities of the financial institution can create avoidable battle of
curiosity and result in poor threat administration, they stated. The high quality of insurance covers could be
compromised resulting from business strain from prospects, the IBAI stated in a letter to the RBI and Irdai, opposing
the apply of banks promoting high-value policies.
For instance, the mortgage publicity of a financial institution could also be Rs 10 crore whereas the entire asset
dimension in danger could also be Rs 20 crore. Insurance is organized by the financial institution for under Rs 10
crore, which results in under-insurance of fifty per cent and leaves the client not absolutely protected when a calamity
occurs. This defeats the very function of insurance safety for each the financial institution in addition to the client,
stated a dealer. “Banks are not geared to understand the various coverage options available under commercial policies
as they lack the necessary in-house expertise. They are not in a position to explain to the customers the terms,
conditions and obligations the customers are expected to fulfil as part of the policy,” the IBAI stated. This leads to
prospects getting the flawed protection, resulting in non-payment for under-payment of claims.

42 The Insurance Times, May 2022