State insurers incur loss in insuring Reliance Infocomm handsets

New Delhi: The National Insurance Company and Oriental Insurance Company have suffered a loss of Rs142.63 crore as they extended their tailor-made insurance polices to the mobile handsets of Reliance Infocomm without risk analysis and reinsurance protection.

NIC and OIC have so far suffered a loss of Rs142.63 crore (NIC Rs126.58 crore and OIC Rs16.05 crore) while General Insurance suffered a loss amounting to Rs41.37 crore, on the basis of paid and outstanding claims and expenses.

While underwriting the unconventional policies, which had serious financial implications, the operating officers did not exercise due diligence and caution and did not ensure the compliance of guidelines issued by IRDA, General Insurance Public Sector Association and the Head Offices of NIC and GIC, which resulted in the loss.

No responsibility has been fixed for the regional or divisional offices having exceeded their powers and exposing the companies to such heavy risk and loss.