Whose consumer is the insured?
Whose consumer is the insured?
Is he a consumer of the surveyor, in addition to being a consumer of the insurance company from whom he bought insurance?
Can surveyor be proceeded against for deficiency of service or unfair trade practice under Consumer Protection Act jointly or severally with the insurer??
Appointment of surveyor in respect of insurance claims in India is a legal requirement under Sec 64 UM of the Insurance Act. This requires a licensed surveyor to survey and assess the loss beyond a certain monetary limit of Rs. 20,000, which has now been increased to Rs. 50,000 for motor claims and Rs. 1,00,000 for other claims respectively.?
While the Act doesn’t say the insurer and not the insured has to appoint a surveyor, normally the appointment as well as the payment fees and expenses are done only by the insurer.?
This issue regarding the relationship of the insured vis a vis the surveyor and the insurer was litigated in the case of BHARMAPUTRA BIOCHEM PRIVATE LIMITED VS NEW INDIA ASSURANCE COMPANY.
The National Consumer Disputes Redressal Commission of India (NCDRC) held that the insured is not a consumer of the surveyor, but of the insurer only. There is no ‘principal – agent’ relationship between the insurer and the surveyor as may cause the surveyor to be liable for acts of ‘deficiency in service’ or ‘unfair trade practice’ on the part of the insurer.
The insured can point out shortcomings, infirmities, incongruities, inconsistencies, acts of omission or commission, errors on fact or law, malafide or malfeasance in the survey report. However, the insured cannot ask for findings of ‘deficiency in service’ or ‘unfair trade practice’ and relief in the form of compensation against the surveyor jointly and severally along with the insurer, when the cause of action itself emanates from repudiation of its claim by the insurer.
There is a distinction between a person who might be wanting in performance of service and be liable for committing ‘deficiency in service’ or ‘unfair trade practice’ and a person whose report is in the nature of evidence to be considered in the adjudication of the merits of the case.
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Since the petition was filed by the insured jointly against the insurer and the surveyor, NCDRC held that there is a misjoinder of parties and the matter was returned unadjudicated with a direction to file a fresh complaint making the insurer the sole party against whom relief is being sought.?
The judgement of NCDRC is available here:?
However, the Supreme Court of India has disagreed with the above judgment of the NCDRC. The court held that the surveyor was made as a joint party for the reason that there are allegations against him in the complaint. Therefore, as a part of principles of natural justice, if there are allegations against the surveyor, an opportunity should have to be given to such person to rebut the allegations.?
The surveyor was not impleaded to claim compensation but as a proper party in view of the allegations leveled against it. Therefore, in the facts and circumstances of the case, the court found that the surveyor and loss assessor was in fact the necessary party. However, it is upon the Surveyor to appear or not to appear before the NCDRC.?
The Supreme Court judgement is available here:
From the above judgement, it should be noted that the Supreme Court has not negated the finding of the NCDRC that the insured is not a consumer of the surveyor and therefore proceedings cannot be brought against the surveyor by the insured for deficiency or service or unfair trade practice.?However, the surveyor can still be made a party to the action being taken against the insurer who will ultimately be responsible for deficiency of service or unfair trade practice.
Arbitrator, Faculty, Author of Fire & Consequential Loss Ins, Fire Coverages, Motor Insurance & TP Insurance claims management, General Ins. Claims, The Insurance Broker, Investigation of claims,
3 年Dear Friends, I am following the discussion on the subject. Extending simple logic of paying fees or that the professional fees is paid from policy holders fund is making the whole thing look too simplistic and may shield the erroring party be it Surveyor or Insurer and may miserably fail to protect the interest of the Consumer. The Surveyor & Loss assessors are appointed as per statute and are mandated with duties and responsibilities in their act of conducting Survey and assessing losses. Marine insurance customarily envisages Insured to appoint surveyor from among the panel of Surveyours provided by the Insurance Company and is required to pay survey fees, which is reimbursed by Insurer if the Claim liability is accepted. Further in case of large claims Insured may also utilise services of professional Surveyor for independent assessment and will become entitle to sue in Consumer court for deficiency in service or if indulging in any unfair trade practice. Surveyor is a licenced independent professional and owes a duty to be fair and reasonable to the Insurer and Insured both and is governed by IRDAI Regulation for Insurance Surveyour_Loss Assessors 2017 and IRDAI Protection of Policy Holders Interest 2017 as amended. Surveyours is merely required to present facts, point out breach of terms and conditions of Policy and assess the loss by using his technical and professional skills. Therefore, his negligence may cost to Insurance Company dearly. Moreover, Surveyours recommendations are not binding on Insurance company. Insurer is expected to take the final decision based on Policy Terms & Conditions and ACT/IRDAI Regulations. As Surveyor's services are enlisted by Insurance Company, hence vicariously he is liable for mis reporting, wrong interpretations and as rightly pointed by Supreme Court must be jointly impleaded with Insurance company. In case of Marine Insurance Surveyor's services are engaged by Insured and Surveyor is certainly liable for deficiency in services, be it late submission of Survey Report, than the stipulated norms or wrong interpretation of policy etc. .
Hire sandwitch based diploma in Automobile Engineering from Sir BPTI Bhavnagar schooling at Home school Bhavnagar
3 年Amendment of Section under 64 concerning surveyor in context of referred case is seem dubiuos need to be endorse as to appointment of surveyor responsibilty and defficiancy in service since survey report is major and pricipal outgo
Regional Underwriting Head at The New India Assurance Co. Ltd.
3 年The insurer is vicariously liable for any deficiency in the discharge of duties by the surveyor. The ultimate responsibility of ensuring that the surveyor does his job is that of the insurer. That said there is a duty of care owed by the surveyor to the insured. There might not be any explicit contract between the insured and the surveyor. The surveyor may not get any remuneration from the insured. But it cannot be gainsaid that the surveyor is an independent professional who is expected to possess integrity and expertise. Any lapses on the part of the surveyor or any compromise in professional conduct will jeopardize the claim of the insured. Even though the insurer is vicariously liable for the lapses of the surveyor in many cases the insurer may not have any control over the situation. So, it is my view that there should be in place a mechanism wherein the surveyor can be sued by the insured for any lapses to ensure better accountability of the surveyor.
Nice read. Could you please look at the last para second line. Perhaps you meant "insured is not a consumer of the surveyor"
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3 年By simple logic sir when the insured is not paying fee to the surveyor how can he be treated as customer ? In fact the insurance company would always be a customer to surveyor?