UNITED INDIA INSURANCE COMPANY LIMITED

Regd. & Head Office, 24, Whites Road, CHENNAI 600 014.

Fire and Engineering

Claims Manual
(Exposure draft - version-2 dated 01.07.2010)

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 Contents

FOREWORD 04
1. Part I – Timely Settlement 05
1. IRDA Regulations on Claim Procedures 05
2. Company’s Code of Commitment 06
3. Requirements from the Insured 06
4. Office Procedure 07
2. Part II – Correctness of Claim Settlement 08
A. Proving the occurrence of loss 08
B. Steps for ascertaining Policy Coverage 10
C. Assessment of the amount to be paid 10
3. Part III – Other Areas of Importance
1. Special areas in Engineering claims 11
2. Repudiation 11
3. Rectification of policy after a loss 12
4. “On account” payment 12
5. Settlement of large catastrophic loss claims 12
6. Office procedure in claims processing 13
7. Claim Note 14
8. Customer Service 15
4. Annexures 16

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 LIST OF ANNEXURES

1.Disposal of salvage------------------------------As per Annexure I

2.Settlement of compromised Claims--------As per Annexure II

3.Settlement of Ex- Gratia Claims -------------As per Annexure III

4.Guide Check List----------------------------------As per Annexure IV

5.Financial Authority for settlement of

Fire and Engineering Claims----------------As per Annexure V

6.Claim Note format--------------------------------As per Annexure VI

7.Claim forms----------------------------------------As per Annexure VII

8.Circulars--------------------------------------------As per Annexure VIII

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 UNITED INDIA INSURANCE CO. LTD.
TECHNICAL (FIRE/ENGG) DEPT: HEAD OFFICE

Foreword

Date: 01.07.2010

Reg: New Fire & Engineering Claims Manual.

*****
The last claims manual was received from GIC after exhaustive discussion of companies and GIC
experts at various levels including the GMs (Tech) with the final views of the CMDs during
September 2000.

With renewed focus in claims management for timely, efficient and correct settlement taking into
account of IRDA guidelines and the Company's commitment, a new Fire & Engineering claims
manual has been prepared. The broad features of the manual are as under:

Part I: Timely settlement:

 IRDA provisions
 Our Company's code of commitment
 Requirements from the insured
 Office procedure

Part II: Correctness of Claims settlement:

 Proving occurrence of loss
 Steps for ascertaining policy coverage
 Assessment of the amount to be paid

Other areas of importance:

 Special areas in Engineering claim
 Disposal of Salvage
 Repudiation of claim
 Rectification of the policy after a loss.
 On Account payment
 Settlement of large catastrophic loss claims
 Office procedure in claims processing and preparation of office notes
 Claim note
 Customer Service
 Disposal of Salvage
 Guidelines for settlement of compromised claims
 Guidelines for settlement of Ex-gratia claims
 Guide Check list for correctness
 Check list for speedy settlement
 Loss survey limits for categorized surveyors
 Financial Authority for settlement of Fire & Engineering claims
 Claim note format
 Claims forms – Fire & Engineering
Exposure Draft of the new manual is enclosed for implementation by Operating Offices and on
receiving feedback for updation, the Manual will be updated and finalised after 3 months.

(P.C. JAMES)
GENERAL MANAGER

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 UNITED INDIA INSURANCE COMPANY LIMITED
Head Office

01.07.2010

Claims Settlement Guidelines Manual

(Fire & Engineering Insurance Department)

Loss indemnification is the purpose for which Insurance is taken by Policyholders. In

other words on the happening of the contingency insured against, losses sustained will
be paid with speed so that the Insured is restored financially to the position just as
before the loss. Guidelines given below are not intended as inflexible rules to be
followed blindly but as guideposts. It is expected that all concerned in the processing of
claims will apply their mind, comply with legal and regulatory requirements and ensure
speedy indemnification in a transparent and correct manner.

In the settlement of claims Insurers need to have two important concerns , viz.,

1.Timely and efficient claims settlement

2.Correctness of the settlement

Part I – Timely Settlement

IRDA Regulations on Claim Procedures:

The Insurance Regulatory and Development Authority (Protection of Policyholders’

Interests) Regulations 2002, sec. 9 deals with claims procedures in respect of
General Insurance Policies. The important points to be complied are as under :

i.The Insurer shall respond immediately to claims intimation.

ii.The Insured should be given clear indication of procedures that should be

followed.

iii.In case a Surveyor has to be appointed for assessing the loss, it should be
done immediately, not later than 72 hours from the time of intimation.

iv.In case, the Insured is not co-operating with Surveyors/Insurer, a letter

should be written to the Insured to avoid the delay.

v.The Surveyor should follow the code of conduct and communicate his
findings within 30 days from the date of appointment.

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 vi.If a delay is necessitated an explanation should be given to the Insured by
the Surveyor.

vii.If on receipt of the Survey Report, clarifications are required, the Insurer
has to ask for the same within 15 days. The calling for additional Report
should not be resorted to more than once.

viii.The Surveyor should furnish his additional report within 3 weeks.

ix.On receipt of the report or additional report as may be required, the Insurer
should offer the settlement or rejection within 30 days.

x.The payment should be made within 7 days from the date of acceptance of
the offer for settlement by the Insured.

2. Our Company’s Code of Commitment

i.To depute Surveyor / Investigator immediately, and not later than 24 hours
from the time of intimation.

ii.To render all assistance to the Insured in submitting the claim and inform
the Insured of all the requirements in support of the claim.

iii.To inform the Insured promptly of the need for additional information while
processing the claim.

iv.To settle the claim, after receipt of all requirements from the Insured and on
receipt of Survey and Investigation Report within 16 working days.

v.To inform the Insured immediately and in any case not later than 30 days
from the receipt of Survey Reports / additional Survey Report, the rejection of
the claim if not found admissible.

vi.To issue cheque for payment within 2 working days after receipt of duly
signed Discharge Voucher.

3.Requirements from the Insured:

The dealing office must make itself accessible to the claimant whether insured or the
beneficiary and obtain the following:

i.Claim intimation in writing, over fax, e-mail, hard copy etc. with an estimate
of claim amount and/or extent of damage.

ii.Policy number, period of cover and also the name of underwriting office.

iii.Duly filled in claim form for sending the same to the underwriting office.

iv.The insured shall be advised to co-operate with the surveyor in all matters
relating to the survey and adjustment of the claim, disposal of salvage and to

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 produce the necessary documents as required to prove various aspects of
the claim.

4. Office Procedure

a.To appoint Surveyors within 24 hours of the intimation of the loss. This
means the officers with appropriate financial authority must be able to do so
after office hours and on holidays. If the Officer-in-Charge is on tour or leave,
there should be delegation of powers to appoint surveyor. RO and HO also
must be equipped to appoint surveyors after office hours and on holidays.

b.It should be ensured that the Surveyor is at the site of loss within 24 to 36
hours of the loss intimation. The Surveyor appointed only must do the survey.
Surveyor sending his Assistant or Junior should not be permitted.

c.The Surveyor's register is to be maintained and the Surveyors’ Panel is to

be kept updated based on Surveyors’ performance. The Surveyors in the
panel must be rotated based on competence. Reference may be made to A 1
under Part 2 for further details.

d.To register the claim in the claims register and open a claim folder. The
claim intimation note may be prepared if the information has been given
orally. A copy of the surveyor appointment letter is to be filed therein.

e.All underwriting papers including Proposal Form, policy copy with all
conditions, Copies of all endorsements and Sec 64 VB confirmation duly
certified are to be obtained. The entire underwriting paper should be
examined for any problem and be kept ready in the Claim File before the
survey report is submitted.

f.To study the underwriting papers and satisfy that coverage exists and the
sum insured including sub-limits are noted. The basis of settlement either
market value / reinstatement for building, plant& machinery is to be recorded.
The deductible, as applicable, should be carefully noted and recorded so that
there is no error at the time of settlement. Any other restrictive clause,
warranty, condition incorporated in the policy is also to be recorded.

g.The Office appointing the Surveyor will be responsible for ensuring that the
Survey Report is submitted within the time prescribed and the Surveyor
follows the code of conduct.

h.On receipt of Survey Report, the Fees has to be paid immediately,

irrespective of any query/clarification on the survey report. If there is any
query / clarifications needed, it should be raised within a week of submission
of the report. The surveyor has to reply to the queries within 10 days.

i.On receipt of the Report including clarifications, claims should be processed

immediately.

j.Cheques should also be paid within 2 days as per our commitment on

receipt of the Discharge Voucher.

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 Part II – Correctness of Claim Settlement

The correctness of claim settlement may be divided into 3 parts :

A.Proving the occurrence of loss

B.Establishing that the cause of loss is covered under the policy

C.The amount, of liability, if any, to be paid, after all deductions.

A) Proving the occurrence of loss

1.A competent Surveyor with relevant skills for handling the type of loss is to be
appointed immediately. The Surveyor should personally reach the site of loss within
24 to 36 hours. If the Surveyor is unable to go personally, then another Surveyor,
should be appointed. No Deputy or Assistant of the appointed surveyor should do the
survey on behalf of the Surveyor.

2.In Fire & Engineering departments, no preliminary survey is to be conducted. The

surveyor appointed will conduct preliminary and final survey. A videograph in
addition to photoghraphs should be arranged in case of large claims.

3.An Officer from the policy issuing office or the nearest office should visit within 24
hours. The visiting person from the office be preferably one who handles the claim /
familiar with claim processing. The Officer visiting should have a digital camera and
take clear photographs. In case of major loss, an officer from head office shall make
a visit to the site immediately.

4.First of all he should meet the insured or the representative of the insured and
assure prompt service. He should co-ordinate with the Surveyor and ensure that all
steps are taken to conduct a proper survey and facilitate the procurement of
necessary documents for proving the claim and quantum of loss.

5.Both the Surveyor and our company representative should take photographs with
the date shown in the photo.

6.There has to be a methodology in taking photos, whereby the total site of the risk
should be shown viz., a panoramic view, thereafter the buildings where the loss took
place. Wherever required, flash must be used to ensure clear photos.

7.The photographs should be saved in the computer and e-mailed to the Office,
which has appointed the Surveyor and to all Offices dealing with the matter
immediately.

8.The Surveyor’s seal and the signature must be put on all the printed photographs
submitted with the Survey Report.

9.In Reinstatement claims, the Surveyor should take photographs of Reinstatement

with date.

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10.Surveyor, as required may obtain statement of Witnesses.

11.The documents required to prove the claim should be explained to the Insured
and all the available records such as asset register, stock register, etc. should be
initialed by the Surveyor and photo copies taken.

12.On returning to his station, the acknowledgement of all the documents received
may be given to the Insured. The surveyor must seek for further documents , if any,
required immediately in writing.

13.When External documents listed below are asked for, copy of such documents
duly attested by the surveyor should be submitted:

a.Fire Brigade Report,

b.Police Report,

c.Forensic report,

d.India Meteorological Department Report in case of weather disaster, etc.

14.The Surveyor / Officer visiting the site should collect Newspaper cuttings, through
the nearest office or directly from the Insured on the date of first visit itself.

15.The Surveyor must do assessment of the physical loss at least on provisional

basis on the first visit itself, and give Interim Report with photos within seven days.

16.Surveyor must correlate the duration of occurrence mentioned in the Fire Brigade
report and other reports to the extent of damage and make specific comment upon
the same.

17.If the Insured wants to re-start the operations, every assistance must be given for
carrying out the same expeditiously. Directions must be given to minimize the loss, in
writing.

18.The Surveyor visiting the site must record the salvage available and give
instructions for disposal of the salvage without delay as per our Salvage Disposal
Procedure.

19.Further visit should be done at the earliest to finalise physical assessment as well
as monetary quantification.

20.Delay by Insured should be always recorded in writing by Surveyor / Office. A

reasonable time limit should be given for compliance to the Insured. If they fail to
comply, the Insured may be informed that the Company will proceed with the
assessment based on papers available.
21.If there is no response, further two notices may be given and unless proper
reasons are given by the Insured, the claim may be dealt with on the basis of
available papers and the policy terms and conditions.

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 B) Steps for ascertaining Policy Coverage

The Underwriting Office must carry out the following:

1.Study whether the loss is covered under the policy. Copy of the policy with all
endorsements is to be provided in the claim file. Compliance of 64 VB ( BG copy, BG
statement, CD statement), history of previous insurance as well as losses sustained
over last 5 years, including the year in which the loss has occurred is to be recorded.
In case of large clients, such an MIS should be available at all times. Inspection
report of the risk if any and any advice given by the company should also be brought
on record.
2.A Copy of the policy with all endorsements and the proposal form, additional
questionnaire, if any, etc. should be sent to the Surveyor for verification. Any other
relevant information should be made known to the surveyor and the claim settling
authority. It should be ensured that the surveyor comments on the validity on
coverage, breach of any of Warranties, Conditions and Exclusions,
3.The basis of settlement, deductible, etc., should also be recorded clearly.

C). Assessment of the amount to be paid

The following aspects shall be addressed by the surveyor:

1.Physical measurements of the goods destroyed / damaged duly supported with

photographic evidence.

2.The details of ownership.

3.Account books as required should be examined and commented upon. In case of

stocks, type of stocks, viz., whether raw material, stock-in-process or finished goods,
as the case may be, with evidence of input costs or value added should be indicated
clearly.

4.Loss/Damage to Dead or obsolete stocks should also be clearly brought out.

5.Depreciation should be calculated based on the rate of depreciation as applicable.

6.After arrival of the gross loss, deductions such as depreciation, salvage, under-
insurance and excess should be made.

7.The Surveyor must ascertain the correct deductible given in the policy and apply
the same before arriving at final net loss.

8.The Business Interruption surveyor should visit the site of loss immediately. All
necessary steps should be discussed with the insured so as to re-start operations
within the least possible time so that the period of interruption can be minimised.
Surveyor should also examine and advise the insured on incurring some additional
cost for reduction in the interruption period. He should also advise the insured on
making up the shortfall in output/turnover. A close weekly monitoring by the surveyor
in B.I. Claims is a must.

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 9.The following Certification should be made by the Surveyor in the Survey report:

a.Loss has occurred during the policy period.

b.Categorical confirmation on the cause of loss and admissibility of claim
and that the Loss is not due to operation of any of the exclusions in the policy.
c.Liability has been assessed only for the items covered under the policy.
d.Proper depreciation has been applied.
e.Salvage disposal has been carried out as per guidelines.
f.Proper valuation has been done and under-insurance / under-declaration
ascertained and loss adjusted accordingly.
g.Aspects of Cenvat / VAT looked into thoroughly and loss assessed
appropriately.
h.Deductibles are deducted properly.
i.Photos depicting the affected property are duly numbered and descriptions of
the damages to the item narrated beside each photo.
j.Reinstatement has been physically verified as also the bills for the same.
k.Reinstatement photos taken and submitted.
l.Compliance of warranties, terms and conditions of the policy.
m.The extent of loss is feasible considering the circumstances of the occurrence
of loss and that the quantum of loss assessed is in order.
n.All the financial records of the insured viz., Balance Sheet, Trading account,
etc. have been duly verified and corroborated.
o.Correctness of the Excise/Sales Tax/ VAT Returns produced to the surveyor is
verified from concerned Departments

PART-III : Other areas of importance

1.Special areas in Engineering claims

a.Surveyors having relevant areas of expertise shall survey all engineering
claims.
b.All engineering policies are subject to repair or replacement, unless specifically
stated in the policy, like in case of total loss settlements.
c.All engineering policies require sum insured as reinstatement value or
completed erected value in case of project insurance.

d.Expenses other than material cost shall be reasonable and in case repairs are
carried out by the insured's themselves, these expenses should be specifically
recommended by the surveyor.
e.Repair or reinstatement of machinery or project work should also be confirmed
by the surveyors along with photographs.
f.If experts or reputed institutions are to be involved for opinion, the same shall
be arranged with the approval of the competent authority only.
g.A layout plan or drawing shall be obtained to indicate major areas affected in
case of large claims.
h. Caution is to be exercised that temporary structures and earthworks, bridges,
etc. required for project / seasonal requirements are not paid unless reinstated.

2.Repudiation

a.Repudiation has to be well thought-out and done in a systematic manner.

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 b.Surveyor / Underwriting Office should record all refusals by the Insured as well
as non-cooperation and non-submission of papers in writing.

c.If no physical loss/damage has taken place, the same should be recorded in
writing. All evidences such as photos, statement of witnesses etc. should be
obtained through physical visit. Other external records such as Police, Fire
Brigade Report, etc should also be collected.

d.If the liability is not admitted under the policy, the repudiation letter must state
the condition / provision of the policy under which repudiation is necessitated.

e.In case of fraud, exaggeration and any other falsification, an Investigator may
be appointed, who should methodologically prove on the basis of documents,
figures and other independent evidence the extent of falsification, fraud, criminal
activity. Every effort must be made to obtain evidence that will stand before the
Court of Law.

f.The competent authority for Repudiation of a claim would be the authority

competent to settle the claim.

g.Where no assessment is made and the claim is Repudiated, the competent

authority for Repudiation would be based on the estimate of loss.

h.Where the cause of loss is not covered under the policy, the policy issuing
office can issue the “No claim” letter indicating that the cause of loss is not
covered under the policy.

3.Rectification of policy after a loss:

Rectification of a policy after a loss is reported for reasons other than breach of
condition/warranty should be carried out as under:

(i) Where rectification involves collection of additional premium, the additional

premium may be charged only on the affected policy period in which the
claim has arisen.

(ii) Rectification can be done by the Authority competent for settlement of the
claim.

4.“On account” payment:

Wherever, admission of liability is clearly established, but exact quantification of

loss cannot be done immediately 'on account' payment shall be considered
based on Surveyor's recommendation, on a conservative basis.

5.Settlement of large catastrophic loss claims

A large number of claims arise owing to natural disasters such as flood, storm,
tempest, earthquake and man-made disasters such as riot and terrorism. In
such cases, in addition to the above, the following action need to be taken, with a
view to ensure speedy and correct settlement of claims.

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 a.Hold a joint meeting with all the concerned Insurers.

b.Representatives of concerned Insurers may make a joint representation before

the concerned civil and Police authorities for speeding up documents issuance
required by us.

c.All news paper cuttings relating to the disaster should be collected and kept in
a large scrap book with necessary references.

d.All employees should be mobilized so that they can attend telephone calls for
assistance, make visits to sites of loss, co-ordinate with Surveyors, with
Government Authorities, etc.

e.Adequate number of surveyors should be brought, if necessary, from other

Stations and asked to camp in the areas of loss with lap-top, cameras, etc. and
visit the claimants along with our employees on the first occasion. They should
take clear photos as noted earlier.

f.Thereafter, Interim Reports should be prepared with recommendation for “on

account” payment / final settlement depending on the type of loss.

g.The Regional Office should make a combined plan for disposal of salvage.

h.Weekly Meetings should be held with Surveyors, with other Insurers and
among our own Officers for co-ordinating and expediting the settlement .

i.Where there are special requirements, Higher Office may be consulted and
permissions obtained.

j.Delegation of authority from Head Office for treating the individual claims
separately may be obtained in time.

k.Weekly statistics should be provided as required by HO/Ministry/IRDA/State

Governments, etc. The RO will collect the same from all the DOs and after
consolidation send it to HO .

6.Office procedure in claims processing and Preparation of Office notes:

a.Obtain claim intimation letter with full details of loss specifying the quantum. If
the insured has made oral intimation, get it in writing as soon as possible. Send
the claim form to insured and ask for detailed estimate.

b.Send the surveyor to the site of loss within 24 hours.

c.Fill up the claims register and the surveyor appointment register.

d.Send Officer/ Senior Employee to visit the site of loss and also to take
photographs. A brief report in writing along with photographs should be
submitted by them. It is to be noted that such visit to the site of loss is 'Without
Prejudice' to admission of liability and / or quantum which shall strictly be upon
merits in accordance with the policy terms and conditions and subject to the

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 surveyor's findings/report. Such visit is to facilitate customer relationship and to
understand the loss.

e.After the surveyor's first visit make the outstanding provision and update it
based on improved information/assessment.

f.Ensure that the letter is sent to the insured seeking documents to prove the
claim, by the surveyor or office.

g.Surveyor's interim report may be obtained with soft copies of photographs if not
already sent immediately after the first visit.

h.Underwriting file to be studied and copies transferred to the claim file with
noting/certifications of 64 VB, special terms and conditions if any and the correct
deductible to be made when settling the claim.

i.Final Survey report to be obtained with copies of all documents to prove the
claim. Soft copies of the report with photographs are to be sent to all offices that
need to process and approve the claim. The Officer appointing the surveyor shall
give specific instructions in this regard.

j.The underwriting and coverage aspects has to be verified and kept ready before
the survey report is received from the surveyor.

k.Queries to the surveyor have to be asked within the time limit stipulated and the
reply obtained similarly. To reduce delays, the claim can be processed
simultaneously by the recommending office as well as the approving office. The
recommending offices shall send their queries to the approving office. The
approving office shall have to then consolidate all the observations and send it to
the surveyor and obtain clarifications at one go. This is to facilitate greatly in
cutting the downtime at various levels, particularly when the approvals are to be
given by a higher office.

l.Then the final processing is to be done and a decision taken by all levels
concerned.

m.If the file has to be sent to higher offices, the underwriting papers may be sent
earlier with certifications of coverage and claims experience within a week of
reporting of the loss, much earlier to sending the final papers with
recommendations.

7.Claim Note:

The introductory claim note details can be elaborate as per current format. But the
actual note should not be lengthy and repetitive and should not go beyond one or
two pages, but should contain all important items which needs to be highlighted to
take a decision. Clear application of mind and clarity of thought can get the office to
the right decision on the basis of the points stated above as to whether a loss took
place, whether the same was covered by the policy and if so, what is the correct
amount of indemnity.

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 The detailed claim note prepared by the policy issuing/processing office shall not be
repeated by the recommending/approving higher office once again. Only areas of
new insights, if any or other highlights alone can be brought out in the subsequent
claim notes.

While enclosing the print out for Sec. 64 VB Compliance, it is to be clearly

mentioned “Yes” or “No” against the column which reads – 'Whether Sec. 64 VB
complied with'- duly signed.

8.Customer Service

As part of customer service, the policyholder/claimant/beneficiary is to be kept

informed of the progress of the claim process as required. If additional time is
required the same must be informed. In case the insured is not cooperating or
providing the required documents, the same must also be communicated and copy
kept in the file.

It is advisable to explain the basis of settlement when it is made. When repudiation is

made the terms and clauses under which the claim is not tenable should be
communicated.

If there is a complaint or dispute:

a.Acknowledge receipt of the complaint immediately

b.Re-examine the matter if there is a possibility based on new information given
or sought, or,
c.Explain the basis or logic of the decision and the procedures followed to arrive
at the same if no scope for review is available.
d.Dispose all complaints/grievances with 15 days.
e.Provide information on the channel of Ombudsman, in case of individuals, or
the Company's Customer Service Department, if they wish to proceed further
with their grievances.

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 ANNEXURE I
Guidelines for Disposal of Salvage

1.Salvage disposal work must start on the first visit itself and may be disposed off at
the earliest as per the procedure for salvage disposal.

2.As far as possible salvage value should be deducted from the loss amount and net
claim amount paid to the insured.

3.If circumstances so require insurer may after consultation dispose of salvage

through surveyor who is required to observe best practices of business for realising
maximum value for the salvage. Such salvage disposal will be without prejudice to
the rights of the insurer as regards admissibility of the claim.

4.Salvage disposal can be undertaken through auction or by inviting offers. However,

companies may take the help of reputed auctioners or organisations specialised in
such activity.

5.Wherever absolutely necessary the salvage can be collected and disposed off in
lots periodically.

6.Whatever be the mode of disposal of salvage, the value realised should not be less
than the expected value of salvage indicated in the survey report.

7.The prime consideration before incurring expenditure in disposal of salvage should

be that the cost of disposing should be economical to the company vis-a-vis the
realisable value of salvage.

8.Where salvage is to be disposed off by the insurer the following procedure is to be

observed.

i)Salvage of estimated value upto Rs.5,000/- may be disposed off by negotiation

with local salvage buyers.

ii)Salvage value exceeding the above limit but upto an amount of Rs.50,000 shall
be disposed of by inviting offers from prospective buyers by issuing sale notices
to all the salvage buyers. Atleast 3 offers must be received to process the sale.
The offers shall be received in writing before date to be specified in advance.

iii)In other cases where the expected value of salvage is exceeding Rs.50,000/-
but upto Rs.2 lacs, it shall be disposed by inserting a sale notice in one widely
circulated daily newspaper at the centre where the salvage is available for
inspection. The cost of disposing the salvage by means of advertisement should
not be beyond 40% of the salvage expected. If it is found that it exceeds 40%
then the procedure indicated under 9.ii) may be adopted.

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 iv)For all salvage where the expected value exceeds Rs.2 lacs the concerned
DO will place a sale notice in more than one newspaper as may be necessary
and which is most likely to be read by the prospective buyers of the salvage to be
disposed off.

v)Disposal through e-auction may be carried out, after ascertaining that it would
fetch a better salvage value.

9.The sale notices inserted in the press should, inter alia, contain the following
particulars :

a.A brief description of the item(s) offered for sale, indicating the approximate
quantity and condition thereof, as also the location where the same can be
inspected by prior arrangement.

b.The item(s) offered for sale must be strictly on an 'as is where is basis with
all faults'.

c.Offers will be received in sealed covers indicating brief particulars of the

offer on top by the concerned in-charge of Divisional Office / Department
accompanied by Earnest Money Deposit remitted by a Bank Draft/Pay Order
(but not by cheque) drawn in favour of the Company for an amount not less
than 10% of the offer value so as to reach not later than … (date to be
specified).

d.Offer received without the requisite Earnest Money Deposit by Bank

Draft/Pay Order will not be considered and will stand automatically rejected.

e.The Earnest Money Deposit will not attract any interest.

f.The right to reject any or all of the offers received, without assigning any
reason whatsoever, is to be reserved by the Company.

g.From the date of receipt of acceptance of the offer, the successful offerer
must deposit, within fifteen days, the balance of the amount offered (90% or
instalments as agreed upon) and arrange immediate removal of the goods
(the whole or part lots as agreed upon) and arrange immediate removal of the
goods (the whole or part lots as agreed upon) at his own expense, failing
which revocation of the acceptance of his offer and forfeiture of the Earnest
Money Deposit should be communicated in writing to the offerer concerned.

10.Office Procedure

The following procedure is to be strictly observed by the Offices concerned in

dealing with offers for the purchase of salvage received through Press
Advertisements.

a.A 'Salvage Committee' consisting of five or three members is to be

constituted by HO (with the concurrence of General Manager, HO, Technical
Department) for each Regional Office. A similar Committee is to be consulted
by each Regional Office for each of its Divisional Offices. Offers must be
opened by at least three members of the Salvage Committee where the

17
 Committee consists of five members or by two members where the
Committee consists of three members on the specified date and at the time
and place specified for the opening of the offers as indicated in the Press
Advertisements inviting offers.

b.No fresh offer is to be accepted in respect of any particular salvage after

the last date for submission of offers as advertised.

c.All offers for the purchase of salvage must be opened not later than the
second working day subsequent to the last date specified for the submission
of offers, as advertised in the Press.

d.Before opening the covers members of the Committee shall ensure that the
offers were sealed.

e.On opening the sealed covers the offer letters will be signed by all the
members of the committee.

f.A Note should be prepared immediately giving full details of all offers
received and noting the decision taken either for acceptance of an offer or
rejection of all the offers received.

g.The highest offer found reasonable will be accepted. If not negotiations can
be held only with the highest offerer for a reasonable amount. The
recommendation will then be sent to the Competent Authority for approval. *

h.Professional integrity and secrecy should be maintained while receiving

offers.

i.If for any reason the committee suspects cartel by the buyers or foul play in
the form of very low offers than indicated by the surveyor in his report then
the committee can reject offers and choose the best method of disposal in the
best interests of the company.

* To fall in line with FSO

Financial authority for Acceptance of Highest offer received

( only when salvage is taken over/purchased by the company)
Description of Power / Authority Limit
Assistant Manager 10,000
Deputy Manager 5,00,000
Manager 25,00,000
Chief Manager/Regional Manager 50,00,000
Dy. General Manager 1,00,00,000
General Manager 2,00,00,000
CMD 4,00,00,000
HO Salvage Committee Actuals

18
11.Modalities for disposal of salvage :

2. As soon as a offer is accepted and approved by the Competent

Authority the concerned office should write to the officer
immediately advising them of the acceptance of the offer, and
showing therein the name of the offerer, the amount offered, the
terms of payment and lifting of the salvage etc.

3. The balance of 90%, or installments as agreed upon, of the

accepted offer must be deposited by the offerer by a Bank Draft or
Pay Order in favour of the Company within fifteen days from the
date of receipt of acceptance of the offer and the successful
offerer must thereafter arrange, at his own cost, for immediate
removal of the entire salvage or in parts/lots as may have been
agreed upon. Sales tax, wherever applicable shall be borne by
the successful offerer.

4. It should, however be borne in mind that, in case the successful

offerer fails/refuses to deposit the full amount as offered by him
within the stipulated period or no response whatsoever is received
from him within fifteen days from the date of communication of the
acceptance of his offer, the Earnest Money deposited by him will
stand forfeited and the offerer submitting the second highest offer
will be permitted to lift the salvage after depositing the full amount
offered by him or installments as may be agreed upon, within
fifteen days from the date of communication of the acceptance of
his offer, provided the differences between the highest offer and
the second highest offer is not more than 15% of the highest offer
and is not less than the expected value of the salvage indicated in
the Survey report.

5. Since the realisable value of perishable commodities viz.

Potatoes, fish, nuts or similar stuff or other terms deteriorates very
fast, disposal of the salvage should be undertaken on priority
basis, for and on behalf of the concerned parties without waiting
for the liability to be established. However, the provision of the
disposal of salvage guidelines should be followed.

12.Discretionary power

The CMD/HO 'Salvage Committee' shall be empowered to exercise discretionary

power to vary the procedure outlined herein.

19
 ANNEXURE II
Guidelines for settlement of Compromised claims

The term non-standard claims has been replaced by compromised claims. All claims
that cannot be settled as standard will be treated as COMPROMISED CLAIMS.

In processing claims the Companies come across where for various reasons they find
that the claims can not be treated as standard. Some examples of such reasons are :

a.Breach of policy condition(s)/warranty(ies);

b.Charging of incorrect premium on account of either misrepresentations or mis-

declaration or non-disclosure by the insured.

The above list is not exhaustive and there may be various other reasons as well. Where
the breach, non-compliance or misrepresentation is such that technically the Company
can repudiate liability but on the merits of the case the Company is of the view that the
claim should be considered, the case may be disposed of on the following basis :

a.Where the breach, non-compliance or misrepresentation is not material to the loss,

settlement may be considered after rectification of the policy.

b.Where the breach, non-compliance, misrepresentation or lapse of any kind is

material to the loss, settlement up to a maximum of 75% of the assessed claim may
be considered.

20
 ANNEXURE III

Guidelines for Settlement of Ex-gratia claims

Cases where there is a dispute with regard to the legal interpretation of the policy
condition or warranty or the scope of cover, the legal advisers may advise that
considering the cost of litigation and chances of success, it is desirable to settle the
claim by negotiation. Such settlements are termed ex-gratia. There are also cases
where the property damaged is either not insured or the policy does not cover the
particular peril causing damage. The insured may be able to demonstrate that such
absence of cover was purely through clerical error and that a well-established practice
exists to effect full insurance of all properties. Claims may be considered in respect of
such exceptional cases on ex-gratia basis. Ex-gratia settlements may be considered
upto a maximum of 60% of the assessed loss.

Financial authority for EX-GRATIA CLAIMS

Description of Power / Authority Limit
General Manager 25,000
CMD 1,00,000
BOARD Above 1,00,000

21
 ANNEXURE IV
Guide Check List

NO GUIDE CHECKLIST FOR CORRECTNESS SURVEYOR OFFICE

(not to be used as reference by audit)
A.POLICY

1 Is the property lost or damaged covered in the

policy and in the period current in the policy?
2 Is the property lost identifiable in the policy

3 If there is a separate value given in the

policy/proposal, has that been taken as the limit?
4 Is Sec 64 VB of the Insurance Act complied with?

5 Is the location of the property in line with the policy

description?
6 Have the warranties and conditions been complied
with?
7 Has any special warranty condition attached?

8 What are the deductible imposed?

9 Is there more than one insurance on the subject

matter?
10 What is the basis of indemnity in the policy –
market value, reinstatement or any other?

THE INSURED

1 Is the claimant the insured and whether the

claimant has an insurable interest at the time of
loss?
2 Is there a bank interest and is the claim to be paid
to the bank?
3 Are there stocks or any other property held on
trust or on commission?

22
 VERIFICATION OF DOCUMENTS

1 PROPOSAL FORM, RFQ, LETTER OR OTHER

COMMUNICATION
2 POLICY COPY

3 CLAIM FORM

4 ESTIMATE OF LOSS

5 SURVEY REPORT

6 STATEMENT OF WITNESSES

7 FIRE BRIGADE REOPORT

8 POLICE REPORT – FIR, PANCHANAMMA, FINAL

REPORT AS AVAILABLE
9 REPORT OF FACTORY INSPECTOR,
ELECTRICAL INSPECTOR ETC.
10 ACCOUNTS, BALANCE SHEETS

11 ASSET REGISTER, STOCK REGISTER

12 OCCURRENCE OF LOSS & CAUSE OF LOSS

13 AMOUNT OF LOSS AND LOSS ASSESSMENT

SPECIAL FEATURES

Fire extinguishing appliances fitted and whether

they worked or not at the time of loss?

CLOSE PROXIMITY CLAIMS – Loss within 5 days

of inception of cover except when it is a
continuous renewal.

23
 CHECK LIST FOR SPEEDY (outer limit) SETTLEMENT

NO ACTIVITY SURVEYOR OFFICE TOTAL

TIME

1 Intimation of claim NA NA NA
2 Appointment of surveyor 24 1
hours
3 Surveyor to visit site of loss 24-36 hours 3
4 Visit of officer of the Company 24 2
hours
5 Status report and Uploading of photos 3 days 3 days
6 Preliminary report of surveyor 15 days 16 days
7 Queries to surveyor 7 days
8 Final report of surveyor with clarifications 30 days 31 days
9 Parallel study of report by concerned 7 days
offices
10 Call for additional clarifications/ 7 days 45 days
documents
11 Payment of survey fee 1 day
12 Delay by insured in submitting papers Letter in 7
days
13 Keep reminding insured Every 15 Every
days 15 days
14 Note to higher offices from time of 3 days
survey report
15 Notice for disposal of salvage
16 Disposal of salvage
17 Issuance of settlement voucher 16 days
18 Issuance of cheque after receipt of 2 days
discharge
19 Time taken for claims on reinstatement 7 days
basis will follow the same so far as
assessment is concerned, except that
the bills of reinstatement will be given as
soon as reinstatement is over and
resurvey with photos will be submitted
within
20 Rejection of claim after receipt of survey 45 days 45 days
report/additional survey report/all
documents

24
 ANNEXURE V
FINANCIAL AUTHORITY FOR SETTLEMENT OF
FIRE AND ENGINEERING CLAIMS

Designation SCALE Fire Engineering

ADMN. OFFICER I 50,000 10,000
ASST.MANAGER II 1,25,000 20,000
DEPUTY MANAGER III 10,00,000 10,00,000
MANAGER IV 15,00,000 15,00,000
DCC 30,00,000 30,00,000
REGIONAL MANAGER V 40,00,000 40,00,000
RCC 80,00,000 80,00,000
DY. GENL. MANAGER VI 1,00,00,000 1,00,00,000
RCC WITH SCALE VI 1,25,00,000 1,25,00,000
GENERAL MANAGER VII 2,00,00,000 2,00,00,000
CMD 4,00,00,000 4,00,00,000
HCC ACTUALS ACTUALS

25
 ANNEXURE VI
Claim Note format

UNITED INDIA INSURANCE CO LTD.

TECHNICAL (FIRE/ENGG) DEPT : HEAD OFFICE
***

SUMMARY PARTICULARS:

1. Name of the Insured/Claimant M/s.

2. Division issuing the policy/ DO

Regional Office RO

3 Insurance Particulars

Pol. Period of Description of Risk Sum Insured Premium Receipt

No. Insurance Rs. in Crs. in Rs. Particulars - Dt.
& Amt.

4. Nature of risk covered

5. Co-insurance details, if any

6. HO Claim No.

7. Date of loss/Damage

8. Cause of Loss/Damage

9. Place of Loss/Damage

10. Items covered under the policy

Affected by loss/damage

11. Special features of the claim

12. Estimated amount of loss

O/S provision as on 31st March

13. Name of Surveyor(s)

14. Survey Report No. and Date

15 Compliance of Section 64 VB Yes

(a) Actual premium payable under Pol.No. Amt.Rs.
the policy/Renewal cover note

26
 (b)
Whether the premium paid was
Provisional or final and if
provisional, the reason
therefor
(c) If paid by cash, date of payment,
amount and Receipt No.
(d) If covered by Bank Guarantee the
Sl. No. or Reference No. of Bank
Guarantee, the amount of Bank
Guarantee, amount available
thereunder and the date on which
Bank Guarantee is debited.
(e) Whether Bank Guarantee was
invoked and if so, the date of
invocation.
(f) The date of premium payment
under Bank Guarantee, Amount
paid and collection particulars.
16. Department wise premium and claims statistics of the insured and the claim ratio for
the last 3 years: (Figures in Thousands)
YEAR FIRE MARINE MOTOR MISC INCLDG.
ENGG.
Prem Claim IC Prem. Clai ICR% Prem. Claim ICR Prem. Clai ICR
s R ms s % ms %
%
2006-07
2007-08
2008-09
17. Surveyors recommendation/
observations as to liability
18. Our observations/recommendations
as to liability
19. If investigator is appointed, please state the
reason and the nature of his findings as to
liability/amount of loss
20. If settlement recommended is as Non-
standard or ex-gratia to give details thereof
21. FINAL ASSESSMENT

Amount of loss assessed by the Surveyors Amount recommended after

considering under insurance,
depreciation, excess etc., as
applicable
Rs. Rs.

22. On Account Payment, if any already made

23. Balance payment to be made

24. Amount, if any, to be retained pending
clarification from the insured/surveyor
25. Recovery of co-insurer’s share of loss in
the earlier ‘on account’ payment

Preamble:

Incident:

27
Cause of loss:

Police Report:

Fire Brigade:

Surveyor:

Extent of Damage:

Assessment of loss:

Details Amount in Rs.

Salvage:

Adequacy of Sum Insured and Declaration:

Warranty:

Surveyor's Recommendation:

BO/DO/RO’s RECOMMENDATION:

APPORTIONMENT OF LOSS:

28
 ANNEXURE VII
CLAIM FORMS

FIRE : Existing Form to be continued.

ENGINEERING : Existing Form to be continued.

29
ANNEXURE VIII
CIRCULARS

30