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On September 20, days after Malik assumed office, the contract for providing insurance to 3.5 lakh regular employees of the state was awarded to Reliance General lnsurance Company Ltd.
Jammu and Kashmir Governor Satya Pal Malik has ordered the cancellation of the J&K Group Mediclaim Insurance Policy for Employees and Pensioners because, according to him, the tenders were allotted fraudulently.
“We are probing this. The tender was invited by some other company, not the government. We are giving this to vigilance and whosoever is involved, whether an official or a businessman, will not be spared,” Malik told The Indian Express.
On September 20, days after Malik assumed office, the contract for providing insurance to 3.5 lakh regular employees of the state was awarded to Reliance General lnsurance Company Ltd. The annual premium for employees and for pensioners was Rs 8,777 and Rs 22,229, respectively. It was mandatory for all state government employees – gazetted and non-gazetted, state universities, commissions, autonomous bodies and PSUs to subscribe to the policy.
According to sources in the Governor’s office, the Trinity Group had floated the tenders on behalf of the government. “Changes were made to the conditions by this front to accommodate Reliance General Insurance Company,” a source, who did not wish to be named, said.
When contacted, Finance Secretary Naveen Choudhary, told The Indian Express, “Trinity came through a bidding process as a transaction advisor, and as a third party interface for grievance redressal. This a standard practice to avoid mistakes since government officials do not have requisite expertise in handling insurance related queries.” He said that the total cost of the group insurance schemes was estimated at Rs 280 crore, of which Rs 60 crore was paid as advance on premium.
Sources in the Governor’s office said red flags were raised over an advance payment of Rs 60 crore made to the company by the state’s finance department through the office of the Finance Secretary. This payment, the sources claimed, was “without the necessary approvals of the Chief Secretary or the Governor”. “The order to cancel the current scheme has been typed and signed and will be issued soon,” the source said.
Malik said many employees resisted subscribing to the policy citing high premium. “This led me to study the files again. I came to the conclusion that there were issues with the scheme.”
Reacting to doubts raised and allegations made by certain quarters, the J&K government’s information and public relations department had issued a press statement on October 9 and said “rhetorical misgivings (are) being created about the Group Medical Health Insurance Scheme.” It said all PSUs and top private insurers were contacted to participate in the bidding process.
“…in the second round, nine companies including Private and Public Sector Undertakings submitted their bids, out of which five qualified on technical evaluation criteria. The financial bid of five qualified companies were opened and it emerged that Reliance General Insurance Company with a quoted premium of Rs 8,776.84 was at L1, National Insurance Company Ltd with quoted premium of Rs 11,918.00 at L2, ICICI Lombard with quoted premium of Rs 17,691.74 at L3, Bajaj Allianz with quoted premium of Rs 23,476.10 at L4 and United India Assurance Company with quoted premium of Rs 27,225.00 at L5.”In response to an earlier query sent by The Indian Express, a company spokesperson said, “Reliance General Insurance got the mandate through the normal tendering process for such mandates that includes both technical and financial bids. Multiple insurance companies like New India Insurance, Oriental Insurance, ICICI Lombard, Bajaj Allianz, National Insurance and United India were among some of the players that had participated in the process for acquiring the mandate.”
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