J&K governor cancels mediclaim policy allotted to Anil Ambani’s Reliance, cites ‘frauds’

  New Delhi: 26 Oct 2018

Jammu and Kashmir Governor Satya Pal Malik has scrapped the group mediclaim policy for state government employees that was allotted to Reliance General Insurance Company (RGIC) following allegations of frauds.

The move comes at a time when the company’s promoter, Anil Ambani, is embroiled in a controversy surrounding the Rs 59,000-crore Rafale deal.

Malik said “it was full of frauds”, the entire process was carried out in a hush-hush manner and even the tenders were opened on holiday to suit the company.

The policy was meant to benefit around 3.5 lakh government employees, including the employees of PSUs, autonomous bodies, local bodies, universities and their dependent family members.

Reliance General Insurance, however, denied the allegations saying it won the policy through transparent means.

“Reliance General Insurance won the J&K government Group Mediclaim policy through an open, transparent and competitive process in which seven insurers participated,” the company said in a statement. “The tender process involved both technical and financial evaluation, and Reliance General Insurance’s winning bid was almost 30 per cent lower than the closest quote, resulting in the best commercial terms for the state government employees,” it added.

The ‘fraud’

Soon after taking over, Governor Malik had given his approval for the implementation of the Chief Minister’s Group Mediclaim Insurance Policy from 1 October.

The state has been under governor’s rule since the BJP pulled out of its alliance with PDP in June.

However, there were allegations that eligibility criterion in the tender notification dated 1 June 2018 was changed from Rs 5,000-crore turnover to Rs 3,000 crore, “only to make RGIC eligible”.

“We are happy about the decision taken by the governor. It was not an open tender. All the stakeholders have been highly suspicious about how suddenly it was allotted to RGIC,” Abdul Qayoom Wani, president of Employees’ Joint Action Committee, told ThePrint.

“For example, a Class IV employee would have to pay a huge chunk of his salary for the health insurance. Isn’t that injustice? We didn’t even know which hospitals were covered by this scheme and how many companies were invited,” he said.

The policy was supposed to provide a medical insurance cover of Rs 6 lakh to individual employees (up to five family members) with a corporate buffer of Rs 10 crore. The premium to be paid by the employee annually was Rs 5,176. For pensioners, it would be Rs 18,628 annually.

However, suspicions were raised by different sections in the state soon after the contract was allotted to RGIC.

“What criterion was followed to select the particular company is not known to anybody, which has raised serious doubts over the scheme, for which the employees have to shell out Rs 8,777 as annual premium,” senior CPI(M) leader and Kulgam MLA, Mohammed Yousuf Tarigami had said in a statement.

The policy was rolled out following a tripartite agreement signed between the state government, a brokerage firm and the insurance company.

The state government had engaged M/S Trinity Reinsurance Brokers Ltd, an IRDA recognised firm, to “design and implement” the mediclaim policy. However, the memorandum of understanding (MoU) signed between Trinity and J&K government was not uploaded on the government’s website, giving rise to suspicion about the entire issue.( The Print )