Accident Claims Industry Making Changes

Accident claims are shaking up in parts of the Asian continent. In Korea, the Korea Insurance Development Institute, is calling for industrial accident compensation insurance - currently under a government monopoly - should be open to private insurance companies.

The institute recently said in a report that the insurance might face serious a shortage of funds in the future. Since 2007, it had a 3 trillion won shortage in its reserves.

It also pointed out that the difference in risk between industries and businesses isn't reflected in the insurance premium. According to the insurance think tank, the industry with highest accident rate is 76 times higher than that of the industry with the smallest rate. Among businesses, the highest is 6.6 times higher than the lowest.

According to the think tank state-run insurance is too lenient in determining the seriousness of an accident. This causes a moral hazard. One factor of this according to the institute, is that injured people will stay in hospital longer than they should, which adds to the financial burden of the insurance operator.

In 2007, the victims of industrial work accidents remained in hospital for an average of 68 days, compared with an average of 39 days recorded in 1995.

Competition can bring better business

The institute suggests that introducing the principle of competition in the market, will allow private insurance companies to do business in the industrial accident insurance sector. Businesses are also pressured by the increasing burden of accident insurance premiums. The premium stood at 4.4 trillion won in 2007, three times more than 1.5 trillion won premium they paid in 1998.

The think tank added that private insurance companies are likely to invest in the prevention of industrial accidents when they enter the market. This can decrease the accident rate, and thus slash the insurance premium burden on businesses that adhere to safety principles.

In India - one of the quickest growing economies in the continent and the world - a new accident claims website is being launched.

The newly-constructed ‘accident claim website', which has been designed by the Delhi Police officers, was inaugurated on Friday by the Chief Justice of Delhi High Court A P Shah at the FICCI auditorium. Justice J R Midha and Commissioner of Delhi Police Y S Dadwal shared the details.

Accident claims website for Indian industries

The website will be beneficial in expediting the process of accident claims to the victims and cutting down on delays. All the police stations will be able to access it and can post information of accident cases on a regular basis.

The website includes a programme for sending the information relating to MACT cases automatically as soon as the form is completely uploaded or within 30 days of the registration of the case.

Congratulating the Delhi Police, Justice J R Midha said: "There are cases in which the claimants are looking for compensation even after 10 years. The website designed by the Delhi Police will help reduce such delays."

Mr Midha also added that in some cases the victims lose hope and even ask for withdrawal of the case. It had become necessary for such steps to come in.

A P Shah, Chief Justice of the Delhi High Court said, "There will be no petition and claims will be settled easily in all motor vehicle accident cases." Shah added that delays in filing documentation to get compensation from insurance companies would end through this website.

Government help to fund compensation

Additionally in India, a High Court recently suggested that the state government make an enactment on recovery of compensation in accident claims when vehicle owner was unable to pay the compensation claim.

The HC's remarks came while hearing a petition filed by Mohammed Ayub, a resident of Kunigal taluk, who was awarded a compensation of Rs 3.91 lakh by the Motor Accident Claims Tribunal (MACT), Kunigal but the owner of the vehicle failed to pay the money.

Justice Ananda Byrareddy observed that where an uninsured vehicle was involved in an accident and owner of the said vehicle is not known, the vehicle itself is the most proximate asset to pay compensation to the victim.

The Motor Vehicle Act is silent on the issue of compensation when owner of the vehicle has no means to pay the same, the HC said.

MACT, Kunigal, dismissed the petitioner's execution petition, where he had sought attachment of movable and immovable properties of vehicle-owner. The vehicle had also been seized by the financier. MACT had dismissed the petition as the vehicle-owner had no movable and immovable properties to pay compensation.


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