R.

KESHAVAMURTHY

_________________________________________________________________________________________________________________________________________________________
SURVEYORS, LOSS ASSESSORS & VALUERS
(Motor , Plant & Machinery )
Licence No. SLA/!"#$ % &"', #
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<he =onora>le Me9>er).,
Select (o99ittee on ?inance 7ill @ "0&*,
Ra5ya Sa>ha Secretariat, NeA +elhi.
Re).ecte4 Sir),
S:>/ A9en49ent) .ro.o)e4 in Bn):rance 7ill "0&* @ (la:)e C# (NeA)1 #*UM @ Re.re)entation ):>9itte4.
DDD
B, U.P.S. Sach4e3a R/O. L:4hiana, a9 an Bn):rance S:r3eyor an4 Lo)) A))e))or (SLA), licen)e4 an4
.racticin6 )ince la)t "' year). B a9 .art o, the 2eneral Bn):rance Bn4:)try, Ahere the in):re4 clientele 6et 9y
)er3ice, thro:6h a..oint9ent (>y in):rer or in):re4) to a))e)) a clai9 a6ain)t a .olicy hel4 >y hi9, in an
:n,ort:nate )it:ation o, an acci4ental lo)) to hi) .ro.erty or >elon6in6), )o in):re4. B ha3e note4 that the
Parlia9ent i) )eiEe4 o, the 9atter to con)i4er the a9en49ent to the Bn):rance Act &$!C thro:6h the 7ill
"0&*, an4 a9 ):>9ittin6 9y 3ieA .oint on i)):e) relate4 to the .ro,e))ion o, SLA). Me9oran4:9 i)
):>9itte4 a) enclo):re to thi) co3er letter an4 B Ao:l4 ):99ariEe 9y ):>9i))ion) in the ,olloAin6 ,eA line).
Bn):rance S:r3eyor an4 Lo)) A))e))or (SLA) i) a )tat:tory entity in 2eneral Bn):rance in4:)try, Aho i) the
only a:thoriEe4 .er)on to F:anti,y the lo)) inc:rre4 >y a .olicy hol4er. Bnter.retation o, .olicy ter9),
co3era6e a).ect) an4 F:anti,ication o, lo)) inc:rre4 >y the .olicy hol4er are Aell 5:)ti,ie4 >y an in4e.en4ent
)tat:tory entity @ SLA @ Aho i) not a .art o, either .arty to the in):rance contract (in):re4 or in):rer).
The need to have an independent SLA, to be in the interest of policy holders has been
submitted earlier to the 41
st
Standing Committee on Finance, headed by Honorable Sri
ash!anth Sinha "i, !hose report and conclusion accepted our vie! point and
recommended to the #ovt$ The conclusion and %ecommendation of the Committee
may please be studied, and an appropriate substantiation may be provided to the la!
ma&ers to ensure that'
The SLA be independent entity not aligning !ith either party of insurance
contract$
The institute of insurance surveyors ()))SLA* be molded as a self regulating body
for the profession, on the lines of )CA)$
The empo!erment of SLAs may be continued in the Act only, since there is no
point in moving to the %egulations under )%+A, !hen )))SLA is to be made a self
regulating body$
Committees vi,' -alhotra Committee (1..4*, /handari Committee (0110* have
recommended that there should be a professional body for the profession of SLAs,
!hich !ould function as a self regulating body, and in due course of time charter to
such )nstitute should be conferred li&e in the case other institutions 2 )CA)$
41
st
Standing Committee on Finance headed by Honorable Sri ash!anth Sinha "i
recommended that'
1$ SLA needs to be independent to be in the interest of insuring public and
0$ )))SLA should be strengthened to be a self regulating body to the profession$
&
FSL%C !hich has revie!ed various regulations proposed 3 made in 4nancial sector has
recommended that the institution )))SLA should be given statutory recognition as a
professional body responsible for the licensing and supervision of Surveyors and Loss
Assessors$
530
The e6pert opinion and the intension of the Act itself envisaged that the entity of SLA
be an independent functionary, not aligning !ith either of the parties to the insurance
contract$
7hile so, it is a matter to be seriously considered that !hether there is a need to move
the empo!ering of SLAs from the Act to the %egulations, by amending the Act as
proposed$ /y doing so, !hat is sought to be achieved8
)n our opinion, such a move only dilutes the status of the SLA as an important
intermediary in the #eneral )nsurance industry, and undermine the importance of
)))SLA to develop into a self regulating body$ The dual control of SLAs by )%+A and
)))SLA as regulators of SLAs often leads to con9ict of interest and gro!th and
development of the profession !ould be hampered$
The e6perience of industry and sta&e holders in the industry needs to be ta&en into
consideration in contemplating any changes in the statute, !hich of course is being
ensured by the #ovt$, in the present case, by giving us an opportunity to submit our
vie!s for the proposed amendment in the Act$
The insured has no role to play (e6cept to decide !hether to insure or not* in framing
the policy !ordings, clauses of !hat is covered and !hat is not, premium payable and
so on$ )n all these, the insurer ta&es the call as per 4le : use norms approved by the
%egulator$ The various clauses, !arranties, e6clusions are not easily understood by
even the !ell educated in the society, unless one has the e6posure to the industry
norms and practices$
)t is only at the time of a claim all these come into focus and it is left to the SLA to ta&e
the call of handling the situation to match the e6pectations of both the insured, and
insurer !hile &eeping in vie! the regulatory norms prescribed by )%+A, and !ithin the
legal frame !or& of the #ovt$ Such a tas& cannot be handled by any entity unless one
has the re;uisite in<depth &no!ledge, "udicious approach bac&ed by appropriate
authority$
Here !e may have to bring to the notice of the =Select Committee -embers>, the role
of )%+A as a regulator, as far as the profession of SLA is concerned$
1$ )%+A has deviated in devising the licensing procedure in the %egulations 0111,
from the Act$ 7hile the Act speci4ed only ?Approved Surveyor@ be it a 4rm or
individual, the %egulator brought in ne! terminology ?Corporate Surveyor@ charging
higher license fee, thus creating a diAerent class of SLAs$, and industry started
special 3 preferred consideration for survey "ob assignments$
1$ )%+A Act 1... laid do!n the ?+uties, 5o!ers and Functions of Authority@ as at
Chapter )B 2 item 14$
)n practice ho!ever, )%+A has either over reached or did not act upon the duties
assigned' as far as the issues of ?SLAs@ are concerned$ Categori,ation of SLAs into A,
/ and C grades and 46ing up ?Financial Limits@ for the "obs that can be handled by the
respective grades' and restriction of departments to only C, though they !ere already
practicing in more than C departments' are the e6amples of !hat the Authority carried
"
out though there is no such po!er or duty assigned to Authority for such an e6ercise,
under the )%+A Act$
F+)s mentioned in surveyor regulations 011C is one such topic that re;uire to be
analy,ed$ )t is not understood as to !hy F+)s are needed in SLA profession$ SLA is a
profession !hich is &no!ledge and individual based, and not much capital is involved
in setting up and practicing the profession$
The happenings in the industry' li&e licensing of employees of insurers to act as SLAs,
)nsurers entering into -DEs !ith the repairers !hich do not form part and parcel of
insurance policy, %epairers, /ro&ers appointing the SLAs for survey "obs 2 against the
directions of )%+A' are e6amples of lac& of control in the industry !hich may lead to
large scale ?siphoning out of fund@ from the insurance pool$
53C
)t is therefore appealed in the right earnest to the honorable members of ?Select
Committee on )nsurance /ill 0114@, !ho are the members of highest policy ma&ing
body of 5arliament in the country, that our submissions as above may please be ta&en
into consideration and also learned opinion of various committees on the sub"ect
matter' and recommend to the eAect that'
1. The statutory status of SLA is retained in the Act itself.
2. The status is further strengthened to remove the ambiguity or
misinterpretation by certain interests; to the efect that SLA means
licensed independent practicing SLA.
. !emove the no survey limit of claims belo" !s.2#$### and incorporate
in its place to mean %All &laims'.
(. !egulations ma)ing po"er be vested "ith the professional body of
SLAs.$ vi*; +,-+A, +,ST+T.T/ 01 +,S.!A,&/ S.!2/30!S A,- L0SS
ASS/SS0!S. +++SLA in short.
4. !ecommend to &onfer &hartered status to +++SLA$ by devising an
appropriate 5road map6 for the purpose.
Should the honorable members feel it necessary that a personal presentation is called
for, ) !ould be able to present myself for the purpose, and clarify or supplement the
submission placed in this -emorandum$
7ith &ind regards,
ours sincerely,
(%$FGSHABA-E%TH*
GnclH
1$ -emorandumH
1$ Anne6ure 2 AH Section I4E- as in the e6isting Act$
0$ Anne6ure 2 /H #a,ette Joti4cation page 2 1.IK$
C$ Anne6ure 2CH %eport of 41
st
Standing Committee on Finance$
4$ Anne6ure 2 +H G6tract of 41
st
Committee %eport < 5age 1LC to 1LK$
M$ Anne6ure 2 GH )%+A Act 2 Ch )B$
I$ Anne6ure 2 FH G6cel Sheet sho!ing the e6isting : proposed provisions of I4E-$
!