Clarification required for claim under Bankers Indemnity Policy

[B D Mohta]

Dear Professional Colleagues,

I would like to seek clarification from experienced miscellaneous claims Surveyors for  Bankers Indemnity Policy.  The printed terms provides under clause (c) Provisos for Retroactive period of cover as follows :-

The company shall not be liable -

i) for losses not discovered within the period of this insurance

ii) in the event of non renewal or cancellation of this policy for losses not discovered within six calendar months next following the date of expiry or the date of cancellation of the Policy.

iii) for losses not sustained within a retroactive period not exceeding 2 years from the date of discovery of any such loss.

Provided that in such retroactive period the insurance was continuously in force with the same company but in no event the company shall be liable to pay any claim in respect of a loss or damage sustained prior to the inception of the Policy.

Now a claim has been reported for which there is different policy period and Basic Sum insured remains the same say Rs. 10,00,000/- each year.  Now the loss has been assessed for each period of different each policy for the same sum insured. The Assessed loss considering the loss within three different period totals more than 20,00,000/- spread to 3 years but not exceeding Rs. 10,00,000/- in a year.  After assessing the loss and deducting Excess the net claim is more than Rs. 20,00,000/-

Will experienced Surveyors can give their opinion that claim loss should be restricted to Rs. 10,00,000/- for Basic sum insured for latest maximum  one year policy amount or the claim can be considered for each year upto Rs. 10,00,000/-. which will cumulatively exceed latest one year amount of Rs. 10,00,000/-

I shall appreciate to know the views of all experienced surveyors handling Bankers Indemnity claims.  Thanks.

 

​CMA ​

B. D. Mohta,

​ FCMA, FIIISLA​

 

​Bangalore

[vithlani...@yahoo.com]

I am also in search  pl.give opinion
kamlesh vithlani
982403719
vadodara

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[bdm...@vsnl.com]

Dear Mr. V S S Acharya,

 

My query is simple, not necessary to fill up the form. thast is simple. The issue is that sum assured is Rs. 10 lacs for all the five years and Policy is contineously in force. The loss has been detected now for previous five years in each period of one year.  As per Retroactive period , loss only for previous two years from the date of detection is to be considered.  Now the loss  is to be considered for previopus two years only which falls in three different policy period. In each year say loss amounts to  Rs. 9 lacs less than Basic sum insured. Can we consider the loss for Rs. 9 lacs for each year and claim may be paid Rs. 27 lacs although in last year policy sum insured remains the same as Rs. 10 Lacs.  This is because Reinstatement premium is deducted at the time of settlement of claim so always sum insured remains the same. Now question is that the claim should be settled only upto Rs. 10 lacs only or Rs. 27 lacs for total of three years  as sum insured is Rs. 10 lacs in each year and retro active period is there and claim should have been considered for each year as per this provisos. Your experienced view is solicited as Policy wording no where says that claim cannot be paid for more than basic sum insured cumulative for three years if retroactive period is valid.

 

B. D. Mohta,

Bangalore

 

 

 

 

 

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Sent: Saturday, February 20, 2016 12:18 AM

Subject: Re: [KIS] Clarification required for claim under Bankers Indemnity Policy

 

Dear Mr. B.D. MOHTA Sab,

Would  TRY to give a reply for your EXAMINATION.......... If following ACTUAL details are give.....except  of course....1st column details;

Poly No	Actual  Polcy. Period	Date of discovery of loss	Dates of happening of Loss	Amounts lost in Each occurrence	Sum Insured	Excess Stipulated
x
y
z

If you think more details will help.... please provide the same....

In the attachment, I have put Assumed dates which will be changed on getting above details....sab...

Regards & Good day,

vssacharya,

9449323720

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Posted by: Shyam Acharya <achar...@gmail.com>

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[Sushil Maroo,Sushil Maroo & Co.,Indore 9827022654]

Shri Mohta Sb.,

I have attended more or less similar claim but in Fidelity Guarantee policy.
The loss was detected in current policy, but the loss took policy in previous year.
The policy was in continuation.
On basis of retroactive period the claim was recommended.

Hence, in your case claim will be for 27 lacs.
If excess, is there it has to deduct 3 times.

[Parmod Mittal]

In my opinion the claims of 3 years should be payable after deducting excess clause for each claim. The insured had policy for the 3 years and had paid premium for 3 years. The fraud is detected within retroactive period. As per Excess Clause each act of dihonesty is considered as separate act then why not each loss.

CA. Parmod Mittal
Mittal Independent Insurance Surveyors
& Loss Assessors Pvt. Ltd. 
Formerly known as Mittal Surveyors (P) Ltd.,
Mittal Street
Amrik Singh Road
Bathinda (Punjab) -151005
mittals...@gmail.com 
Website: www.mittalsurveyors.com
(M) 098140-35030
(O) 0164-2250590

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[B D Mohta]

Dear Colleagues,

I also agree with the views of Mr. Mittal but Insurance company does not agree to consider the loss for previous two years. Then what is the meaning of Retroactive period. So I want authority reply to show to the insurance company for their consideration. Thanks.

CMA B. D. Mohta,

Bangalore

On 26 February 2016 at 16:56, Dulal Das <dula...@gmail.com> wrote:

Shri Mittal is right.
It is not 'a' claim but 3 claims.

DC Das

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B. D. Mohta, 

B. D. Mohta & Associates
301-A, Brooklyn Apartments,
15-A, Rear Basement Room,
63, Banaswadi Road,
Bangalore-560033

Telefax: 080-25481597

[Dulal Das]

Shri Mittal is right.
It is not 'a' claim but 3 claims.

DC Das

On Feb 26, 2016 12:49 PM, "Parmod Mittal" <mittals...@gmail.com> wrote:

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[bdm...@gmail.com]

Me. Das,

I have already stated that Policy was continuously in force with the same insurer & same amount. The loss has occurred in three different period within the Basic sum insured so give your opinion if loss will have to be paid for more than present total sum insured for Rs. 10 lacs for  total loss  Rs. 27 lacs for 3 years & in each year less than Rs. 10 lacs after applying Excess when the loss has been discovered at present for even previous period. Your opinion please.

B. D. Mohta

Sent from my iPhone

On 27-Feb-2016, at 7:21 PM, Dulal Das <dula...@gmail.com> wrote:

Dear Shri Mohta,

 

1.       Retroactive  means operating backward.

2.       Please consider the following of PROVISION/PROVISO :

Provided that in such retroactive period the insurance was continuously in force but in no event the company shall be liable to pay any claim in respect of a loss or damage sustained prior to the inception of the original policy.

 

Since the insurance was not renewed (Having different policy periods) and hence the insurer might consider it as not continuous. If this holds good then situation changes. In all probability, the Insurer might be right. We have to see the PROVISO in-Toto. Because that the insured had policies during retroactive period not necessarily imply that the claim is payable as the same has been controlled by the term "continuous" by the insurer.

However, more views are welcome.

Thanks,

D C DAS

[bdm...@gmail.com]

Yes, all is done & my views are also same but Insurance company says Policy is only for Rs. 10 lacs so more than this amount cannot be paid although each year loss is less than Rs.10 lacs since the present policy is for Rs. 10 lacs only & retroactive period is only to consider that loss which will not be payable since loss exceeds than present Rs. 10 lacs . I disagree as according to me claim is payable for previous years also due to retroactive period. I want reply with Authority to show them. I do not know who is more authority above RO to show them. Your suggestion please. Thanks. 

CMA B. D. Mohta,

Bangalore 

Sent from my iPhone

On 28-Feb-2016, at 11:46 AM, Dulal Das <dula...@gmail.com> wrote:

D

[Dulal Das]

Dear Shri Mohta,

Definitely, all 3 claims are payable for each event subject to following condition (if exists in the issued policy):

“The indemnity granted under this policy in respect of such direct losses will not exceed:

a)      The sum insured hereby –

i)..

ii) in respect of any one casualty or event.

b)      Subject to (a) above twice the sum insured hereby in respect of all losses in any one period of Insurance.”

That is, a ceiling is put by Insurer on its amount of liability although SI is reinstated.

Thus, Shri Shaym Acharya’s table might be helpful in deciding the amount of liability.

Thanks,

D C DAS

[B. D. Mohta]

I agree what Mr. Dulal Das has opined. I feel if customer Bank can file a case in Court perhaps Insured may win. Insurance Co. is not going in right direction as per my feelings.

[Dulal Das]

Please place the matter to HO.
It took an HO around 2 years to inform RO that my understanding of  a policy is right! Accordingly, the RO had to act although the matter was very simple.

[mohan israni]

Dear Mr. BD Mohta,

In such cases where the Insurer at any level does not agree with your recommendations, you merely submit your final report the way you feel it right as per the terms and conditions in the policy cover. Make sure that, What ever you have assessed and recommended, is also conveyed to Insured . Now if the claim is settled on your recommendations, there is no problem, but if there is deviation from your recommendations, it is the duty of Insured to deal with the Insurer; and it is the duty of Insurer to satisfy the Insured on such deviations in settlement. Good Luck                        Mohan Israni    

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