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Report of the Working Group on Insurance,
Pensions and Small Savings
Financial Sector Legislative Reforms Commission
1. Overview
Vide Order No. 3/2/2011 - FSLRC dated 26 July, 2011, the Financial Sector
Legislative Reforms Commission (FSLRC) constituted a working group on
insurance, pensions, provident funds and small savings, consisting of:
1. Mr. Dhirendra Swarup - Chairperson
2. Mr. C. S. Rao - Senior Advisor
3. Mr. Tarun Bajaj
4. Ms. Anuradha Prasad
5. Mr. Rajendra Chitale
The mandate of the working group was to examine the current legislative and
policy framework in the fields of insurance, pensions, provident funds and
small savings, identify the major limitations in this framework and suggest
necessary changes.
The working group undertook a review of existing laws, recommendations
made by previous expert committee reports and international best practices
and in each of the areas under its consideration. Extensive consultations
were also carried out with government and private stakeholders, through
written consultations as well as in-person meetings.
The working group is pleased to submit this report to the FSLRC. The report
consists of three main sections:
1. Insurance
2. Retirement financing (pensions and provident funds)
3. Small savings
Each section contains a discussion on the relevant issues identified in that
area followed by the recommendations of the working group. A summary of
the recommendations is contained in the executive summary of the report
for ease of reference.
11. Role of surveyors - The role of an insurance surveyor is to evaluate
claims made by insured persons and assess whether the claim is payable.
The present legal framework gives the insurance regulator the power
to license and cancel the license of surveyors with very limited powers
being given to the Indian Institute of Insurance Surveyors and Loss
Assessors.
Recommendation 19:
(1) The Indian Institute of Insurance Surveyors and Loss Assessors
should be given statutory recognition as a professional body re-
sponsible for the licensing and supervision of surveyors and loss
assessors.
(2) In order to protect the interests of consumers, the legal framework
should allow the consumer to appoint a surveyor in addition to
the surveyor required to be appointed by the insurer. The insurer
will be required to consider both reports before making a decision
on the claim.
3.5.11Role of surveyors
The role of an insurance surveyor is to evaluate claims made by insured
persons and assess whether the claim is payable and the extent to which
the insured ought to be indemnified. Although the surveyor report is not
binding on the insurer, it is given serious consideration by the insurer as well as by courts while assessing insurance claim disputes.44
The Insurance Act empowers IRDA to issue licenses to surveyors and loss
assessors. It also has the power to cancel such licenses. 45 In this context,
Standing Committee (2011) has expressed that view that the Indian Institute
of Insurance Surveyors and Loss Assessors (IISLA), which is a professional
body of surveyors and loss assessors, should function as a self regulatory body
for this profession (like the Institute of Chartered Accountants of India and
the Institute of Actuaries of India). The working group is in agreement with
this suggestion. IISLA should be the body responsible for the supervision
of its members and accordingly, the power to initiate disciplinary actions
against surveyors should also vest with IISLA.
Under the present law, it is the duty of the insurer to obtain the opinion
of the surveyor in specified cases with a power given to IRDA to call for a
report from an independent surveyor.46 The law does not provide for the
right of the consumer to appoint a surveyor. The working group is of the
view that the interests of consumers will be better served if the law provides
for the consumer’s right to appoint his own surveyor (in addition to the
insurer’s surveyor). In cases where such an appointment is made, the opinion
of both surveyors should be taken into account by the insurer while deciding
on the claim. In case of a dispute between the insurer and the insured, both surveyors’reports would be considered by the adjudicating authority.
Recommendation 19:
1. The Indian Institute of Insurance Surveyors and Loss Asses-
sors should be given statutory recognition as a professional
body responsible for the licensing and supervision of survey-
ors and loss assessors.
2. In order to protect the interests of consumers, the legal
framework should allow the consume to appoint a surveyor
in addition to the surveyor required to be appointed by the
insurer. The insurer will be required to consider both reports
before making a decision on the claim