CAG asks for investigation into insurance for WLL services.(INDIA)(Comptroller and Auditor General)(Brief Article)

Asia Pacific Telecom, May, 2005

The Comptroller and Auditor General (CAG) has asked for an investigation regarding the insurance of mobile phones used for WLL services of Reliance Industries and Tata Teleservices by the National Insurance Company (NIC) and the Oriental Insurance Company.

The NIC has accumulated claims of over $58 million against a premium income of only about $20 million, while Oriental Insurance Company, has to settle about $7.7 million in claims.

As per the CAG report, the two public sector insurance companies suffered huge losses, since the risk evaluation was not done carefully.

However, this type of coverage of financial risk policy was non-conventional and issued in the Indian market for the first time.