Page 49 - Insurance Times Octoberr 2022

Mumbai businessman kin get record Rs. It denied the liability to pay the compensation.

4 crore solatium for 2016 death The tribunal said the insurance company had not produced
evidence to support its claims.
In possibly the highest payout in recent times, the Motor
Accident Claims Tribunal ordered the owner of a dumper
Reforms in insurance law are in order
truck and an insurance company to jointly pay around Rs
4.13 crore compensation (with interest) to the family of a GoI is reportedly looking at changes in the insurance law,
Sakinaka 54-year-old garment businessman, who died af- including lowering the minimum capital requirement, to
ter his bike was rammed into by the heavy vehicle in 2016. drive up insurance penetration. Easing the minimum capi-
tal requirement of 100 crore will help reduce the initial
The tribunal relied on the income tax returns, which it said
hurdle for new-age companies foraying into the sector.
was "a statutory document on which reliance may be
placed to determine a victim's annual income". The tribu- Allowing different types of insurance companies such as
nal refuted the insurance company's claims that since the micro-insurance and agriculture insurance - akin to differ-
victim was not wearing a helmet, he was responsible for ent kinds of banks catering to different customer classes -
his death. The family had sought compensation of Rs 3 will foster innovation. Greater competition will drive down
crore. costs and give policyholders a wider choice. The capital
requirements after the initial roll-out are a function of the
The wife of Jameel Shaikh and his six children moved the
volume of business and, so, depend on the insurer's book
tribunal on November 7, 2016, against the dumper truck
size.
owner Gauri Jadhav and New India Assurance Co Ltd.
Insurance is a risk-based business. Premium payments lie on
The family said on August 28, 2016, between 3-4pm while
the books of insurers, and prudential norms require insur-
Jameel proceeding from Sakinaka to Powai on his motor-
ance companies to provide for more capital as premium
cycle, the truck came from behind in "high, improper
collections rise. So, more capital will be necessary if
speed" and knocked him down. Jameel was taken to hospi-
these insurers want to grow.
tal, where he was declared dead.
A vibrant insurance market that can attract long-term
An FIR was registered against the driver for causing death
funds calls for more reforms. Rightly, the FDI cap was hiked
by negligence. The dumper owner didn't respond to the
to 74% from 49% to allow foreign partners majority con-
claim and the order against them was passed ex parte.
trol. Reportedly, two rules - one that requires insurance
The insurance company argued that had Jameel worn a companies to have an identifiable promoter with a 50%
helmet, which was mandatory in law, the head injury could stake in perpetuity (unless another promoter steps into his
have been avoided. It is contended that the driver of the shoes), and another barring M&As between insurance and
offending vehicle was not holding a valid and effective driv- non-insurance entities - are seen by some as roadblocks to
ing licence at the time of the accident and thus, insured investment. A road map for stake dilution makes sense
has committed breach of terms and conditions of the policy. when a company is professionally managed and capable of
The Insurance Times, October 2022 49