CHAPTER VII SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 7.1 SUMMARY OF OBJECTIVE AND ANALYSIS USED The summary of objectives and the analysis used to support are given as follows: L. The first object is to identify the various factors that influences ‘Motor Third Party Claim Management’ in public sector non-life insurance companies. Several factors like ‘Police Dept, ‘Court and Lawyers’, TRDA/Government’, ‘Legal Rules and Procedures’, ‘Hospitals and Doctors’, ‘Insurance Companies’, Society at Large’, ‘Legal’, ‘Administrative’ factors, ‘Internal’ and 'Overall' corrective steps are identified using ‘Literature study’, ‘Court Case Analysis’ and ‘Investigations’. 2. The second object is to analyze the factors for its level of influence to the ‘Third Party Claim Problems’, Segregation done based on 'Area-wise' factors, ‘Legal’ factors and ‘Administration’ factors and analysis carried out by using ‘Average Score Analysis’ ‘Friedman's Non-parametric Test’ and 'Chi-square test’ to find the influences of the factors towards the 'Third Party Claim Management’, 3. The Third objective is to identify and prioritise the internal and overall steps to improve the 'TP Claim Management’. Analysis carried out by using Average Score Analysis! ,"Mean Ranking’ ,'Friedman's Non-parametric Test’ and ‘Chi-square Test’ to find the priority of steps to be taken to improve ‘Third Party Claim Management’. 7.2. SUMMARY OF HYPOTHESIS TESTING RESULTS Table 7.2.1 Hypothesis testing results Hypothesis Testing methods Findings HI ‘Average score, F test, Friedman test Strongly supported H2 Average score, F test, Friedman test Strongly supported HB Average score, F test, Friedman test Strongly supported HA Average score, F test, Friedman test Strongly supported HS Average score, F test, Friedman test Strongly supported 1847.3 MAJOR FINDINGS OF THE STUDY 7.3.1 Descriptive Analysis The data collected fiom the respondents were classified, tabulated and presented in ‘Simple Percentage Analysis’ which was performed for finding the factors, opinion ete about the motor TP claim problem .The main findings of the descriptive statistics are given below:- 1. The selected respondents "Admin Officers’, 'Legal Officers’, 'Panel Lawyers’ are in the ratio 46:12:19 ,( ie 4:1:2 Appx.) and the respondents are equally selected from each Public sector Non life Insurance Company. 2. When comparing the areas like Fire, Marine, Motor, Miscellaneous claims all the respondents stated that only the ‘Motor claims’ contributes more to the losses of the public sector companies. 3. All the public sector insurance companies’ respondents stated that, in ‘Motor Portfolio’ the 'Third Party Claims’ alone contributes more to the losses of the companies. 4. Most of the respondents stated that the person ‘Insured’ is the major problem in "Third Party Claim Management’ and next to it is the ‘Police’ and the next is the 'Driver' and 'Others' contribution to the Third Party claim problems. 5, Regarding the 'Possibility of Minimizing Third Party Claim Problems’, majority of the public sector insurance company respondents states that there is a possibility of reducing 'Third Party Claim’ problems. 6. Majority of the public sector insurance companies' respondents have the opinion that, privatization of insurance companies will reduce the Third Party claim burden to the public sector insurance companies. 7. It is observed from the table that no respondents expressed their agreeability for the columns (even though 5 scale questionnaire were given) "Disagree" and "Strongly disagree" to "Police Dept Contribution to Third Party", "Courts/Lawyers Contribution to Third Party", "Legal Provisions Contribution to Third Party", "Society at large Contribution to Third Party", "Hospitals and Doctors Contribution to Third Party". 185It clearly shows that the Third Party issues given under the respective topics in the questionnaire are very much prevailing. For "Legal Provision/Procedure contribution to Third Party" no respondents expressed their agreeability for the columns "Not Influencing", "Not Strongly Influencing", it clearly shows that all the Third Party issues given in the respective topics are very much prevailing. 8. It is observed from the table that no respondents expressed their agreeability for the columns "Low Priority" and "Very Low Priority” in the headings "Internal Steps to improve Third Party Claim Management" and "Overall steps to improve Third Party claim management”, if clearly shows that all the issues given in the respective topics in the questionnaire are very much relevant for improving Third Party claim management. 7.3.2 Average Score Analysis To study the level of agreement factors that contributes towards 'Third Party Claim Problem’ and level of influence on 'Third Party Claims’ towards claim management the 'Average Score Analysis’ was used. The average score were obtained from the respondents on various issues to determine the factors influencing the 'Third Party Claim Problem’ and the corrective steps to be taken to improve the ‘Third Party Claim Management. From the analysis the summarized findings are given as follows:- 1. The classification of respondents by 'Name of the Company’, ‘Nature of Work’, ‘Experience in Third Party claim' and the level of agreement about the factors "Police department contribution to Third Party problem", "Insurance Companies contribution to Third Party problem" "Court/ Lawyers contribution to Third Party problem", "Legal rules and procedures contribution to Third Party problem", "Society at large contribution to Third Party problem", "Hospitals and Doctors contribution to Third Party problem", "Administrative problems contribution to Third Party problem", "Overall corrective steps to improve Third Party problem" are not having significant difference. v . The classification of respondents by ‘Name of the Company' and the level of agreement about "IRDA/ Government contribution to Third Party Problem" having significant difference. 1863. The classification of respondents by 'Experience in Third Party Claim’ and the level of agreement about "Legal Problems Contribution to Third Party problem" having significant difference . . The classification of respondents by ‘Experience in Third Party Claim’ and the level of agreement about "Internal Corrective Steps to Improve Third Party problem" having significant difference . Hence, the findings using "Average score analysis" and "F test" show that the majority of opinions (level of agreement) given by the respondents does not differ significantly except a few. 7.3.3 Frequency Percentage and Mean Ranking Frequency percentage is to find the highly influencing, Influencing factors among the given factors that affects the 'Third Party Problem’. Mean ranking is to rank the preferences among the given factors. ‘The summarized findings of the analysis are given as follows: A) Areawise Factors that Affects TP claim Management Taking the area "Police Department" most of the respondents ‘Strongly Agree" to the factors Accidents booked under light charges by the police department, Poor co-ordination with agencies, Poor / No Investigation, Corruption, Treating insurance cases as burden / extra duty, Late / vague FIR contributes to the Third Party claim problems and Most of the respondents ‘Agree’ to the factors Late Information to court ,Poor maintenance of Records/Case files False/ Fabricated FIR/ Converting non RTA into RTA, and Corruption. The result shows that all the ten factors stated under the police department segment more or less equally contributes to the 'Third Party Claim Management Issues! The ranking also confirms the statement. Taking the area "Insurance Company" most of the respondents stated ‘Strongly Agree" to the factors Poor investigations, Poor administration, Poor contesting and poor coordination between agencies prevailing in the insurance companies, Poor communication/modernization and procedural lacunas. Most of the respondents 187Til. IV: "Agree" to the factors Red tapism in depts, Poor Communication /Modernization, Procedural lacunas, Poor investigations, Poor contesting of cases, Poor coordination between agencies, Poor administration, Fraud, No accountability and responsibility. Poor Investigations, Poor administration, Poor coordination between agencies are ranked high in the order of importance as an issue among the ten factors. Fraud, Corruption in insurance companies is the least contributing factor. Taking the area "Court and Lawyers" most of the respondents "Strongly Agree” to the factors Limited defence available for Insurance co/award always in client favour, Onus to prove lies with Insurance company ,Pay and recovery clause, Liberal /Inconsistent compensations, Social welfare legislation attitude, Poor co-ordination between agencies and Long pending cases and delayed justice. Most of the respondents "Agree" to the factors No priority in disposal of TP cases, Social welfare legislation attitude, Poor co-ordination between agencies, Long pending cases and delayed justice. Liberal interpretations, Liberal inconsistent Compensations, Pay and recovery clause usage. Liberal / Inconsistent Compensations, Limited defence available for Insurance co/award always in client's favour, Social welfare legislation attitude, Poor co- ordination between agencies, Long pending cases and delayed justice, Liberal/inconsistent Compensations are ranked high as an issue among the ten factors. The factor "Corruption" in court/Lawyers is the least contributing factor. Taking the area "IRDA/ Government” most of the respondents "Strongly Agree” to the factors Not able to control /solve most of the Issues of Insurance companies, Committees and Expert advises not effectively implemented, Poor control/limited Power exercised, No accurate Information/data and statistics on Third Party, No strict accountability imposed on offenders. Most of the respondents "Agree" to the factors Committees and Expert advises not effectively implemented, No accurate Information/data, No adequate research on TP claim problem, Not able to control /solve most of the Issues of Insurance companies. Poor control/limited power exercised. 188VI. Committees and Expert advises not effectively implemented, Not able to control Jsolve most of the Issues of Insurance companies, Poor control/limited Power exereised are ranked high in the order of importance as an issue among the ten factors. The factor "Not compelling Pvt., Companies on Third Party issues" is the least ranked factor which shows that it is not a major contributing factor. Taking the area "Legal Provisions and Procedures" Most of the respondents "Strongly Agree" to the factors like Onus to prove lies with Insurance co, Favour to the claimants, Not adequate /does not cater Specific issues, Prevents direct settlements, Most of the respondents "Agree" to the factors like Implementation and monitoring difficult for regulators, No strict punishments for offenders, Pay and recovery clause, Accident booked Sections not deterrent, Prevents direct settlements, Interpretation problems/no clarity, Causes delay in processing. Onus to prove lies with Insurance co, Favour to the claimants, Not adequate /does not cater specific issues are ranked high in the order of importance as an_ issue among the ten factors. Interpretation problems/No clarity" is the least ranking factor and it indicates that it is the least contributing factor. Taking the area "Society at Large" most of the respondents ‘Strongly Agree’ to the factors Insured/Witness/public not cooperating with insurance companies, High population/Poverty/Using substandard modes of transport, Carried away by Misguidance. Most of the respondents ‘Agree’ to the factors Corruption, Poor awareness /ignorance on TP claim/Motor rules ete, Treating TP claim as a money making business, Poor road safety awareness/not following traffic rules, Loss of honesty and abetment to fraud, Carried away by Misguidance/Easy Pubic money attitude. Insured/Witness/public not cooperating with insurance companies, High population/ Poverty/ Using substandard modes of transport, Carried away by Misguidance are ranked high in the order of importance as an issue among the ten factors, The factor "Automobiles skipping mandatory Third Party cover" is the /east ranking factor and it indicates that it is the least contributing factor. 189VII. Taking the area "Hospitals and Doctors" most of the respondents "Strongly Agree" to the factors Business attitude than serving the society", Exaggerated injuries/ Disablement /Inflated Medical bills, Corruption. Most of the respondents ‘Agree’ to the factors Poor records maintenance / transparency in hospitals, No coordination with other agencies like police, insurance co etc, Corruption, Forging /Tampering/falsification of records, No accountability/ Responsibility, Forming cartels to defraud insurance co, Non road traffic accident registered as RTA's. Business attitude than serving the society, Exaggerated injuries/ Disablement / medical bills Corruption are ranked high in the order of importance as an_ issue among the ten factors. The factor "Difficult to prove guilty in court about doctors/hospitals" is the least ranking factor and it indicates that it is the least contributing factor comparatively with other factors. B) Administration and legal factors I. Administrative Problem Most of the respondents stated the following factors as "Strongly Influencing" the Third Party claim management like Poor contesting ability/limited defence and follow up of cases by staffs/Panel lawyers, High rate of pending cases/dragging of cases for years before various courts, Poor coordination between the sageontiesd poor inter- company exchange of information, Poor fraud detection and control system in operation, Poor claim investigation, Transport association oppose / restricts increase in premium/ Loading, Average Third Party claim value per policy is more than the average premium collected per policy, Yearly premium collection method and not life time cover, More and more new Third Party cases reported every year and it becomes unmanageable. Most of the respondents stated the following factors as "Influencing" the Third Party claim management like Without cross subsidization of premium from profitable sectors Third Party will be a loss, Mostly Commercial vehicle / two wheeler covered by Public sector insurance co's under compulsion. Poor training /faulty recruitment policy/frequent transfers, Inadequate / Inexperienced staffs deal with Third Party claims, Cartels formed to obtain fraudulent claims ,Insured not cooperating with insurers, No agency commission for Third Party risk cover, More number of claims reported than 190value per claim, Inadequate solatium fund induces fraud, Poor modernization of claims processing, High retention ratio, Poor maintenance of statistics and records by public sector companies, Multiple claim registration for single accident /Duplicity of claims. Poor contesting ability/limited defence and follow up of cases by staffy/Panel lawyers, High rate of pending cases/dragging of cases for years before various courts, Poor coordination between the agencies/ poor inter-company exchange of information, Poor fraud detection and control system in operation, Poor/Un professional claim investigations, Transport association opposes / restricts increase in premium/ Loading are ranked high in the order of importance as an issue among the ten factors. "High corruption rate prevailing in the departments" is having the /east ranking hence it was the least influencing factor. IL. Legal Problems Most of the respondents stated the following factors as "Strongly Influencing" the Third Party claim management like Dependence of several agencies to effectively defend the Third Party case and no coordination, No ceiling in liability for Third Party claims, Dragging of Third Party cases by courts for years /increased cost of contesting ‘winning chances bleak for insurance companies, Social welfare legislation attitude Jalways favourable to client side by court, Limited defence for insurance company and liberal interpretations by court, Pay and recover clause used indiscriminately by courts like Section 149(4) of M.V. Act, Burden of proof lies with insurance company. Most of the respondents stated the following factors as "Influencing" the TP claim management like Mandatory requirement sec 158(6) of M.V. Act not followed, Proving with evidence normally not possible in Third Party claims by the insurance Company /non cooperation by the insured, Poor contesting ability by insurance co staffs and panel lawyers,70.13% No limitation period fixed to file a Third Party claim, Decided cases gives different interpretations and no standardization in awards Geographical disparities persist, Negligence need not be proved for claiming compensation, Fraud and corruption in judiciary affects Third Party claim process, Burden of proof lies with insurance co, Procedural aspects, Contributory negligence defence not available to the insurance company. 191Dependence of several agencies to effectively defend the Third Party case and no coordination, No ceiling in liability for Third Party claims, Dragging of Third Party cases by courts for years /increased cost of contesting /winning chances bleak for insurance companies, Social welfare legislation attitude /always favourable to client side by court, Limited defence for insurance company and liberal interpretations by court, Pay and recover clause used indiscriminately by courts like Section 149(4) of M.V. Act are ranked high in the order of importance as an issue among the legal factors. The least ranked factor as per the mean ranking score was "Procedural aspects", Contributory negligence defence not available to the insurance company". C) Internal and overall corrective steps to improve TP problem I. Internal Corrective Steps the Insurance Companies can Adopt Most of the respondents stated the following factors as "Very High Priority" to improve the TP claim management like Timely/ Efficient / Professional Investigation, Special investigations to be conducted and police complaint lodged if fraud ,claims are suspected /detected ,Effective and prudent underwriting, Defence must be specific and backed by evidence and panel lawyers should be shrewd and tactful, Trying for compromise settlement /lokadalat in appropriate cases, Create awareness to the public about road safety/mandatory Third Party cover/Claim reporting, Repeatedly insist and report about the problems faced in Third Party claims at appropriate forums, Limitations of defence to insurance company should be considered and cases to be contested accordingly, to coordinate/have regular contacts with other agencies / Departments for timely responses/ mutual information, Fraud prevention/detection and control mechanism in place, Defending/monitoring and replying to the court within proper time to avoid Ex-party, Briefing of latest developments about cases/court decisions between the Third Party staffs and panel lawyers , Enough Training for knowledge/ Exposure/ experience for panel lawyers /Third Party staffs, Monitoring/follow-up of court cases effectively, New developments! Issues/Specific information shared by all insurance companies, Adopting scientific method of calculating premiums and convincing the transport associations /vehicle owners for increase in premium, Claim files should be properly maintained /updated/evidence document preserved. 192Most of the respondents stated the following factors as "High Priority” to the Third Party claim management as follows: Third Party Claims procedure manual should be made available to concerned staffs, If claim not covered communication has to be sent immediately stating the reason, Grievance redressal procedure in place to address policy holders grievances, Only suitable cases has to be allowed to appeal to save time and money, Regular internal audits to be conducted to review the position, Cannot transfer liability to others, except as may be expressly provided for in policy conditions, To educate the Insured about the consequences of wrongful acts and false statements, Frequent meeting with connected agencies, Pay and recover clause has to be dealt with carefully due to the fact that recovery chance is very less, Training to staffs in Third Party related issues, Proper claim reporting system in place (Example- standardized claim form),Conducting meetings /seminars /expert panel discussions on Third Party issues, Proper qualifications and experience to be fixed for claim dept staffs, Claim files should be properly maintained /updated/evidence document preserved. Timely/Efficien/Professional Investigation, Special investigations to be conducted and police complaint lodged if fraud claims are suspected/ detected, Effective and prudent underwriting, Defence must be specific and backed by evidence and panel lawyers/Third Party staffs should be shrewd/Tactful ,Trying for compromise settlement Nokadalat in appropriate cases, Create awareness to the public about road safety/mandatory Third Party cover/Claim reporting ete are ranked high in the order of importance as an issue among the ‘Internal Corrective Step' factors. Least ranked priority factors as per the mean ranking score was Conducting meetings /seminars /expert panel discussions on Third Party issues, Do not conceal policy coverage provision of any insurance policy when they are pertinent to a claim, Proper coding/reporting and maintaining claim statistics. Proper provisioning to be made for Third Party claim/losses. II. Overall Corrective Steps to be taken to Improve the TP Claim Management Most of the respondents stated the following factors as "Very High Priority" to the ‘Third Party Claim Management’ like Include a term or condition in the policy that the insured should also be fixed with protected and suitably rewarded, Strict norms to be 193fixed in issuing driving licenses, Strict punishments for violations in license procedures, Central and the state government should cooperate to regulate and implement motor related issues, Passing a new set of rules/Amending M.V. Act and procedures to regulate Third Party issues, Effective fraud prevention/ detection/ control system should be in operation, Maintenance of common Motor risk pool to meet out Third Party claim, Additional cess on fuel can be collected by government for payment of Third Party claim instead of insurance concept, External expert consultancy can be availed for insurance companies. Most of the respondents stated the following factors as “High Priority" to the Third Party claim management as follows: Limiting the Third Party liability and fixing maximum ceiling like Airways and railways. Limiting the Third Party liability and fixing maximum ceiling like Airways and railways, Amendment of IPC to make the accident punishment more severe, Limiting the Third Party liability and fixing maximum ceiling like Airways and railways, Increasing the coordination between the agencies involved like police, court, hospitals, RTO offices etc, Separate court /police wing for accident cases atleast for state level, Government should consult transport association regarding motor related new policies/procedures/amendments ete, 'Solatium Fund' to be increased and payment should be made according to the situation 'Solatium Fund’ to be increased and payment should be made according to the situation, The court should consider the insurers as the custodian and trustee of the funds collected from the people and have to observe utmost care in awarding compensations, Improved /modern infrastructure for Insurance companies, Courts, RTO offices has to be provided, The factors like Include a term or condition in the policy that the insured should also be fixed with proportionate responsibility, Whistle blowers policy should be in place and they must be protected and suitably rewarded, Passing a new set of rules and procedures to regulate TP issues, Strict norms to be fixed in issuing driving licenses ,Strict punishments for violations in license procedures, Central and the state government should cooperate to regulate and implement motor related issues, Maintenance of common Motor risk pool to meet out TP claim, Effective fraud prevention/ detection/ control system should be in operation, External expert consultancy can be availed for insurance companies are ranked high in the order of importance among the overall corrective step factors. 194Improvement in road conditions/better traffic regulation and educating public on road safety is the least ranked factor. 7.3.3 Fried man test and Chi-square test Result shows that the 77 respondents do have equal preference for all the ten factors in ‘Police department Contribution to TP Problem’. For all the other factors like "Insurance Companies contribution", "Court/ Lawyers contribution", "IRDA /Government contribution "Legal rules and procedures contribution", "Society at large contribution", "Hospitals and Doctors contribution", "Administrative issues contribution", "Legal issues contribution", : "Internal corrective steps for improvement" and "Overall corrective steps for improvement” the respondents agreeability on 'Third Party Claim Problem’ does not have equal preference for all the ‘factors in respective headings. 7.4 IMPLICATIONS OF THE STUDY a) Research implications Among several implications which could significantly impact the research in 'Third Party Claim Management literature, the paramount ones are listed below: 1. This research should be seen as a preliminary attempt to address a multidimensional issue that has important implications on ‘General Insurance Claim Management’ in public sector insurance companies. The major features of the present study are: i) Consideration of large number of dimensions in meast ing ‘Third Party Claim Problems' ii) Sample from persons connected to 'Third Party Claim Cases’ from all the four public sector insurance companies are taken with adequate representation. iii) The factors are divided into specific topics and the topics are subdivided into several parameters to get an in-depth analysis. iv) Selection of suitable statistical techniques like Friedman's non-parametric test, Mean ranking, 'F' test etc in assessing the research model. 195Thus, this study turned out to be unique in nature and hence the research implication from this study is far reaching. 2. ‘The study on ‘Third Party Claims Management’ has not progressed significantly and there is a drastic need for such a research in this subject, The 'Third Party Claim Problems’ faced by the Indian insurance industry is alarming and unmanageable , and moreover no clear effort has been made to find the problems and the way out for the insurance companies. With these gaps identified through the review of extant literature, a concerted effort has been made to study the overall problems that influences 'Third Party Claims Management’. 3. The overall problems in the ‘Third Party Claims Management’ in public sector companies can be brought to light and this study will help and gives insight into various areas in "Third Party Claims Management for future research in this area, 4, Findings of this study will help to improve the efficiency of the 'Claim Management System in Public sector insurance companies. 5, The general approach of this study makes it explicit the unexplored reasons and different dimensions of the problems in 'Third Party Claims Management’, 6. It gives awareness to the reader about the magnitude of the 'Third Party Problem’. 7. The 'Third Party Claims Management’ study here points to three major areas of research like 'Legal Reforms’ and 'Administrative Reforms’ and the ‘Regulators Role’. b) Managerial implications Several managerial implications emerge from the study and the significant ones are presented here. 1. It is very evident from the study that "Third Party Claims’ are the real threat for the survival of the public sector insurance companies. The findings of the study expected to help the management to understand the basic problems in ‘Third Party Claims’ and the results of the study enable the management of public sector insurance companies’ to revamp their strategies and to redraft their policy regarding "Third Party Claims Management’, 1962. ‘The identification of the factors influencing "Third Party Problems’ and internal steps to improve may help the insurance company decision making authorities to think the general insurance management concepts to have a paradigm shift in their approach. . Based on the framework developed through the study, the multi dimensional aspects of TP claim problem brought to light and the multifaceted approach required to be carried out by the public sector companies, in the task of managing the 'Third Party Liability’ can be evolved . . The study also points out the urgency and the necessity for intervention by the Regulating and controlling authorities (IRDA and the government), and their responsibility to help the Public sector insurance companies in managing the ‘Third Party Claim Problems'. 7.5 LIMITATIONS AND FUTURE DIRECTIONS A number of suggestions in respect of findings and limitations identified in this study are sited here, so that the future researchers would address these issues more concretely. wo They are as follows:- It is a general study taking into account all the aspects on ‘Motor Third Party Claims Management’, Hence, specific issues like 'Fraud Management’, ‘Legal Management’, ‘Internal Administration’,’ Regulatory Functions’ etc., are not dealt in-depth as it was beyond the scope of the study. The selection of the districts and the selection of persons is a mere arbitrary process. No specific criteria apart from the sample size eighty from all the four public sector companies in three districts and from three categories of persons connected to insurance companies are taken. Hence the Actual results may vary depending on the area of operation, type of respondents, type of company etc As the study based on questionnaire, the result may vary according to the opinion of the respondents. To have an overall study on Third Party claim, the study proceeded with available literature, claim investigation and a lucid attempt has been made to find the overall 197factors that affect Third Party claim management, Researchers are encouraged to pursue this line for corroborating this effort. Due to time constraint, only the particular period is taken for study and it may not hold good for an extended period. This study is made taking the insurance company's position/view point on "Third Party Claim Management’. The focus has been given only to the insurance company’s point of view. Only the insurance company related persons opinion is taken for consideration. It may reflect its own limitations. Applicability of the results may vary due to change in situations like new judgment pronounced or new legislations enacted etc To make the possibility of overall study on multidimensional "Third Party Issue’ the areas are segregated /allocated based on some arbitrary criteria Hence issues taken pertaining to the headings may not be exhaustive and complete. Based on this study result one cannot generalise the implication to the whole industry. This thesis will help and guide the researchers in this area to have a bird eye view regarding the complexities of the problems involved in "Third Party Claim Management’. ‘This research thesis will be an eye opener to the private sector insurance companies also in dealing with "Third Party Claims’ and also this gives scope for further research on this subject by the private sector companies for efficient "Third Party Claim’ handling. Researchers may take each factor affecting "Third Party Claim’ separately for study like "Third Party claim and the Role of Hospitals’, ‘Third Party claim and Regulators’ , ‘Road safety and Third Party Insurance’, ‘Fraud management and Third Party' ete, and in-depth analysis can be made to have a thorough knowledge and understanding in that particular segment. This research on 'Third Party Claims’ will also be useful to have further research on topics like ‘Road Safety Management’, ‘Fraud Management in Insurance 198Companies’, Role of Social welfare legislation in insurance, Risk management, Regulators role ete In summary, addressing these areas for further research will extend this study's current findings and enable a more comprehensive understanding of motor Third Party claim problems and the corrective steps to improve Third Party claim management. ‘These insights will also guide the Insurance companies and the controlling / regulatory authorities to implement effective steps to make the Third Party claim management effective for insurance companies. Thus gaps in understanding and explanation of Third Party claim problems are still wide. The researcher hope that the findings of the future researchers covering all the issues listed could contribute to knowledge and understanding and in unraveling the latest developments in Third Party claim area, ‘The present research can very well be used as a sign-board in that direction. 7.6 SUGGESTIONS OF THE STUDY Based on the key findings of the study, the following suggestions are outlined and it is divided into two parts as follows: I. Suggestions for the public sector Insurance companies in India II. Suggestions for the regulatory and controlling authorities . Suggestions Figure 7.1 FOR THE INSURANCE COMPANIES IGGESTIONS FOR THE REGULATORY AUTHORITIES I. Suggestions for the Public sector Insurance Companies 1. For TP related cases the companies should file counters disputing the claims on material points (Specific defence) based on the evidence and the circumstances of the case and not the general defence normally followed by the panel lawyers. At the 199time of defence, the two important aspects like ‘Limited defence availability’ and "Social welfare legislation attitude’ should be kept in mind. Preliminary discussions should be made with the concerned investigator, police official, claim stafff and the panel lawyer etc before the counter is prepared, Diligent and prudent short-listing of panel lawyers should be made considering their experience and their antecedents. Due attention should be paid in ensuring appearance and examination of defence witnesses and in production of defence documents to counter the claims effectively. Continuous monitoring and follow up of cases should be ensured. Latest Supreme Court and High Court judgments, amendments made in the motor vehicle Act, circulars issued by IRDA, Government notifications, Inter office circulars, crucial informations to be exchanged among the branches, companies ete are to be circulated and briefed to the concerned officials and it has to be applied in a proper manner to get the maximum benefit for insurance companies. Investigation of ‘Third Party Cases’ is the only source that provides the base (evidences) for defence, hence it should be given a very high preference by the insurance company. In addition to the police investigation, every insurance company must have a well experienced investigators team of private investigators with good integrity and professional expertise .Timely and professional investigations should be ordered and necessary policy/procedure for identifying and engaging private investigators should be framed. It is the only way that will increase the chance of proper defending Awinning the case and it minimises the chance of falsification! fabrication/tampering of the records. ‘Though computerization and e-Governance has attained importance in many areas of functioning in the Insurance Industry, still improvements in infrastructures like separate servers, networking, on-line connectivity, database availability for verification of specific information about vehicles and claim history, claim processing software etc are to be provided. Appeal against the order of lower court (MACT) should not be engaged unless it is necessary. If appeal is preferred in Appellate Court (High Court) then "Stay order" should be obtained in time to avoid the release of the deposited money by the MACT 200Courts to the claimants. Proper coordination must be there between the appeal filing branch and the policy issuing branch which is normally lacking between the branches of the same public sector company. Court cases has to be reviewed, monitored and audited frequently by the competent authorities and any deficiencies in approach regarding contesting of the case, filing documents etc has to be corrected immediately. From the stage of issue of 'Motor Third Party Policy’ and receipt of claim intimation and up to the stage of settlement of claim, all the process need carefiul and professional approach. There should not be any slackness. Particular attention should be taken for commercial vehicle related 'Third Party Cases’. 24 hours accident monitoring, reporting and emergency care centers are to be set up under the direct supervision of insurance companies. Dealing with ‘Third Party Claims’ need multi sector and multidimensional approach. Only with proper integration and coordination of all the agencies the insurance company can effectively manage the ‘Third Party Claim’. All efforts should to be taken to increase co-ordination with agencies like police, RTO, Court, Hospitals ete. The Insurance Company should play a lead role in integrating the agencies and should frequently conduct meetings, discussions ete regarding "Third Party Claim Problems’. Suitable recruitment, training and transfer policy has to be followed to staffs particularly for persons dealing with 'Third Party’ areas .Accountability and responsibility have to be fixed for staffs dealing with TP claim related issues. The officers dealing with the ‘Third Party Claims’ should not be over-burdened with a large number of claims and they have to be provided with necessary infrastructure, so that they can effectively monitor the progress of the claims before the MACT and other courts. Proper fraud prevention, detection and control mechanism has to be in place so that automatically the system has to detect and contain the fraud attempts made. Strict punishments and suitable actions should be taken on staffs who is involved in or abetting frauds. Immediate and effective complaint about fraud cases should be 201Suggestions for the Regulatory Auth 1. lodged to the concerned authorities and necessary cooperation has to be rendered by the company to punish the offenders. Law should be suitably amended to include insurance fraud cases as a ‘Criminal Offence’ with high punishment. . Proper representation has to be made individually /jointly by the public sector companies about the specific issues faced in dealing with 'Third Party Claims’, with accurate information to the IRDA, the Union government and the State Government and continuously insist on necessary steps to be taken to mitigate such issues. . Prudent and effective 'Underwriting' should be followed by the companies to contain ‘Third Party Claims’. The "Underwriting’ Section should be more vigilant in "Underwriting’ motor liability. . Awareness has to be created among the Public about the 'Third Party Claim Procedures' and proper grievance redressal system should be in place . 'Third Party Claims Procedure! has to be standardised and a full-fledged/updated manual should be provided for the dealing persons and the offices, to follow. . Internal administration in public sector insurance companies has to be strengthened in all fronts to compete with private sector and transparency in operation in public sector companies has to be followed. . Special attention should be given by the Insurance authorities for Third Party Claim’ related issues and the 'Third Party Claims’ should not be treated at par with other claims. ies (IRDA/Government) Motor Vehicle Act has to be amended for Sections like 163 B, 170,166,142 2(b) ete dealing with Unlimited liability, no period of limitation, no jurisdiction limitation, Pay and recovery clause, Tribunals right to enhance compensation, Tribunals Permission required to go for appeal, diluted defence in driver's issue, Liberal ‘compensation etc. 'Third Party Concept has to be relooked by the Government and steps has to be taken to amend the Motor Vehicle Act, 1988 suitably to bail out the public sector insurance companies from heavy losses incurred by ‘Motor Third Party Claims’. 202v Steps to be taken to fix the insured /vehicle owner with proportionate "Third Party Liability’. Insurance "Whistle Blowers Policy’ and safety measures including "Whistle Blowers Safety law" has to be introduced. This will help to minimise frauds. Strict norms has to be fixed in 'Driving License’ related issues and strict punishment should be awarded for violations of licensing procedure. ‘Common Motor Risk Poo!’ created should be strengthened and continued ,even if it is opposed by the private insurance companies. Charging additional cess on fuel instead of insurance concept can be tried. The government should provide necessary funds for modernisation, Improving infrastructure of insurance companies. Necessary amendments to be carried out in IPC (Indian penal code) to make the accident punishments more severe at least in cases of negligent, careless and drunken driving. External consultancy and compulsory credit rating of insurance companies have to be implemented for improving the financial efficiency and solvency of the insurance company. ). The concerned State Government should issue effective orders and strict directions to the Police department, RTO offices and hospitals ete to curb the mishandling of ‘Third Party Claim' related issues and the offenders has to be punished for violations. . Necessary funds are to be allocated by the Union and State Governments for road laying, maintenance and road safety and a coordinated effort of both the Union and State Governments will reduce accidents etc . Insurance is a Central subject, IRDA is a Central legislation. Under Section 14 of IRDA Act, 1999 the Authority has the duty to "regulate, promote, and ensure orderly growth of the insurance business" and in accordance thereof, it has become necessary to legislate for creation of an Insurance Fraud Bureau to curb and to deal with frauds or Increase the manpower in CBI to deal effectively and quickly in TP 203related cases, Special insurance cell to be formed at state and central level to enquire and try doubtful and fraudulent cases. It will ensure that the insurance money is disbursed only to the genuine cases within a reasonable period, so that the purpose of social welfare legislation is fulfilled. 13. MACT courts, CBI courts and judges are to be increased to encourage speedy disposal of 'Third Party' related cases. 14, 24 hours accident monitoring, reporting and emergency centers have to be set up in accident prone areas and informations to insurance companies have to be provided then and there. 16. Modernisation has to carried out in RTO, in Police dept, in road safety, in insurance companies, in Courts etc. 15. Political interference in public sector companies has to be curtailed. 16. Long term/Life time insurance premium can be introduced instead of yearly premium. 17. Proper and strict implementation of the provisions in law like Motor Vehicle Act etc., will reduce most of the problems faced by the insurance companies at present. ‘The controlling authorities like the Union and the State government has to take steps to see that necessary provisions are implemented strictly by the authorities concerned. 7.7 CONCLUSION "Motor Third Party Liability’ comes under ‘Social Welfare Legislation’. To fulfill this social welfare motto the Motor Vehicle Act (which provide guidelines to "Third Party Claims’) is purposely constructed in a liberal sense, always in claimants favour and with limited defence to insurance companies, so that the injured /claimant can get an assured compensation without much hardship and complications, But this very motto of 'Social Welfare Legislation’ is misused / misinterpreted in most of time by the agencies involved in "Third Party Claim Process’ like insurance companies, RTO, Court, Police dept, Hospital and doctors etc. 204The public sector insurance companies find it very difficult to manage the ‘Third Party Claim’ as it has the duty to serve as a trustee to the premium received from the client at one end and it has to justifiably compensate the genuine claimant (Third party) at other end without affecting the ‘Social Welfare Principle’ and to run the business at a competing, profitable and cost effective way. No one realizes that the insurers are custodians and trustees of the funds collected (Premium) from the people and have to observe utmost care in managing the same. The society has a larger responsibility than the insurers in ensuring this as insurers neither generates nor extinguish funds but merely manages it. ‘Third Party Claim Management’ is a coordinated and combined effort by the agencies connected like ‘Insurance companies’, ‘Central Government, ‘State Government, IRDA’, ‘Court’, 'RTO', "Hospital and Doctors’ ete and individually the public sector insurance companies which is vested with absolute "Third Party Liability' has only a few option because in the ‘Third Party Claim Process’ and decision on payment of compensation the insurance companies is having very little say or no control. The agencies like 'Police’, ‘RTO ,'Insurance company’, 'Hospitals and Doctors’, ‘High courts’ ete are not dealing with 'Third Party Claim Duty’ alone but in addition to "Third Party’ related duty they are also vested with other important duties to perform “Hence "Third Party Duty’ becomes an additional burden and it may cause them to under perform in ‘Third Party" related areas. In spite of all limitations prevailing at present, the solution lies in suitable amendment of Motor Vehicle Act atleast on major problem-areas like ‘Unlimited Liability’, 'Pay and Recovery Clause’ ete., without affecting the 'Social Welfare Motto! “The regulating and controlling authorities like Government/IRDA should take concrete steps like implementing the provisions in strict sense etc., to protect and bail out the public sector companies from the 'Third Party Claim Problems’. For example: The hands on experience of the researcher by conducting in-depth ‘Practical Investigations’ of hundreds of 'Thitd Party Cases’ in public sector insurance companies (In addition to questionnaire survey) revealed fraudulent cases worth crores of rupees and various lacunas prevailing in managing 'Third Party Claims’. The cases filed 205on fraudulent "Third Party Claims’ based on the investigations by the researcher are enquired by Tamilnadu State CBCID and most of them proved as fraudulent and some major cases are taken by CBI for enquiry, These cases brought to light, made a break through in "Third Party fraud Control" at all India level. In a case related to the researcher's investigation, National Insurance Company Limited Vs. Director General of Police and 28 others reported in 2006-2-L.W. 176, considering that crores of rupees of public money is involved and larger public interest is at stake in view of the false and bogus insurance claims, thought it fit to entrust the investigation to the CBI .The investigation was taken over by the CBI. Subsequently, Tamilnadu state judicial academy (2009) it was reported that nearly 800 Motor accident claim petitions were withdrawn before the Tribunals and the claims of compensation to the tune of Rs.100/- crores were withdrawn. Many fraudulent cases are withdrawn from the court stating "Not pressed". Now based on the cases revealed, strict instructions are given to the "Police departments" and the "Insurance Companies" for the effective dealing of fraudulent claims ete. Hence the "Priority of an Improvement Step", (i.e)"Thorough investigations of Third Party Cases in Public Sector Insurance Companies" explicitly proved, and this strongly supports the view of this research. To address the "Third Party’ related issues a long term and multi-thronged strategy is necessary. If the suggestions of this study are properly implemented, it will not only strengthen the public sector insurance companies but also helps to reasonably compensate the general public genuinely affected by "Motor Third Party" related injuries. In addition to this proper "Third Party Claim Management’ will also contribute for ‘Social Welfare’, "Road safety’ "Automobile Risk Management’, 'Fund Mobilization for Economy’ etc. 206