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Friday, April 3, 2015

Who is a Surveyor in Insurance ?


Dears -  There are always some areas which we interact daily but not aware of the origin or the actual meaning.  In Insurance Companies, being in Claims Department,   Day in and day out we employ surveyors.  Who is a surveyor ?  What is the criteria ?  How and why do we appoint them  ??

The following will give you all some elementary idea on this. The attempt is only to introduce you to the concepts.

 Surveyors can be individuals and sometimes companies.   Surveyors compulsorily need to obtain licence from Govt. Of India.  Every surveyor and loss assessor, whether a company or firm or an individual, shall be eligible to carry on the work as a surveyor or loss assessor, as per the categorisation specified in the licence.

You need to know that there is a constituted Regulatory body known as IRDA.  (Insurance Regulatory & Development authority) which is created by an act of  Parliament.  This is IRDA Act 1999.  IRDA presently is the authority for issuance of licences to Surveyors.  IRDA has formulated regulations for licencing known as :  Insurance Surveyors and Loss Assessors (Licencing, Professional Requirements and Code of Conduct) Regulations, 2000
Some important definitions as per this regulations :

(a)       “Act” means the Insurance Act, 1938 (4 of 1938);

(b)       “applicant” means any person who applies for the grant of a surveyor’s and loss assessor’s licence or renewal thereof;

(c)       “Authority” means the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);

LICENSING PROCEDURE

2.         Application for, and matters relating to,  grant of licence

(1)       Every person who is an individual and intending to act as a surveyor and loss assessor in respect of general insurance business shall apply to the Authority for grant of licence
(2)       The Authority shall, before granting licence, take into consideration all matters relating to the duties, responsibilities and functions of surveyor and loss assessor and satisfy itself that the applicant is a fit and proper person to be granted a licence. In particular and without prejudice to the foregoing, the Authority shall satisfy itself that the applicant, in addition to submitting the application complete in all respects:-

(a)       satisfies all the applicable requirements of section 64UM read with section 42D of the Act and rule 56A of the Insurance Rules, 1939;
(b)       possesses such additional technical qualifications as may be specified by the Authority from time to time;
(c)       has furnished  evidence of payment of fees for grant of licence, depending upon the categorisation;
(d)       has undergone a period of practical training, not exceeding 12 months, as contained in Chapter VII of these regulations; and
(e)       furnishes such additional information as may be required by the Authority from time to time.
      
(3)       The Authority on being satisfied that the applicant is eligible for grant of licence, shall grant the   same in FORM-IRDA-2-LF as given in the Schedule to these regulations and send an intimation to the applicant together with an identity card mentioning the particular class or category of general insurance business namely, fire, marine cargo, marine hull, engineering, motor, miscellaneous and loss of profit  for which the Authority has granted licence and the licence shall remain valid for a period of five years from the date of issue thereof, unless cancelled earlier.


(4)       A surveyor and loss assessor shall be subject to categorisation as specified in Chapter V of these regulations.

A licence issued, before the commencement of these regulations, by the Controller of Insurance or his authorised representative shall be deemed to have been issued in accordance with these regulations.

DUTIES AND RESPONSIBILITIES OF A SURVEYOR AND LOSS ASSESSOR
13(1) A surveyor and loss assessor shall, for a major part of the working time, investigate, manage, quantify, validate and deal with losses (whether insured or not) arising from any contingency,  and report thereon, and carry out the work with competence, objectivity and professional integrity by strictly adhering to the code of conduct expected of such surveyor and loss assessor.
(2) The following, shall, inter alia, be the duties and responsibilities of a surveyor and loss assessor:-
(i)        declaring whether he has any interest in the subject-matter in question or whether it pertains to any of his relatives, business partners or through material shareholding;
Explanation: For the purpose of this clause ‘relatives’ shall mean any of the relatives as mentioned in Schedule IA to the Companies Act, 1956;
(ii)       maintaining confidentiality and neutrality without jeopardising the liability of the insurer and claim of the insured;
(iii)     conducting inspection and re-inspection of the property in question suffering a loss;
(iv)      examining, inquiring, investigating, verifying and checking upon the causes and the circumstances of the loss in question including extent of loss, nature of ownership and insurable interest;
(v)       conducting spot and final surveys, as and when necessary and comment upon franchise, excess/under insurance and any other related matter;
(vi)      estimating, measuring and determining the quantum and description of the subject under loss;
(vii)    advising the insurer and the insured about loss minimisation, loss control, security and safety measures, wherever appropriate, to avoid further losses;
(viii)   commenting on the admissibility of the loss as also observance of warranty conditions under the policy contract;
(ix)      surveying and assessing the loss on behalf of insurer or insured;
(x)       assessing liability under the contract of insurance;
(xi)      pointing out discrepancy, if any, in the policy wordings;
(xii)     satisfying queries of the insured/insurer and of persons connected thereto in respect of the claim/loss;
(xiii)   recommending applicability of depreciation and the percentage and quantum of depreciation;
(xiv)    giving reasons for repudiation of  claim, in case the claim is not covered by policy terms and conditions;
(xv)     taking expert opinion, wherever required;
(xvi)    commenting on salvage and its disposal wherever necessary.
(1)       A surveyor or loss assessor shall submit his report to the insurer as expeditiously as possible, but not later than 30 days of his appointment.
CATEGORISATION OF SURVEYORS
14(1) A surveyor and loss assessor shall be categorised, as mentioned in sub-regulation (3), based on the following criteria:
(i)        professional qualifications;
(ii)       training undergone;
(iii)     experience as a surveyor and loss assessor and any other relevant professional experience;
(iv)      any other criteria, as may be specified by the Authority from time to time.
The categorisation shall be done and reviewed from time to time on the basis of a point system evolved by the Authority in consultation with the Committee referred to in Chapter III of these regulations.

The categorisation shall consist of allocation of one or more specified departments of insurance business, based on the factors mentioned above and shall include categorisation of the surveyors and loss assessors into three categories, viz., Category A, Category B and Category C.

With  Regards - S. Sampathkumar

PS : Circulated to my group on  7th June 2006 and posted on Web now.  Not much has changed other than the categorization which has remained contentious !!

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