Railways insures you for just 0.0475 paise!

New Delhi: Lalu Yadav may be opposed to the privatisation of India’s railways, but his passengers will be insured by a private party, for the second time around.

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Leading private sector insurance firm ICICI Lombard has bagged the prestigious railways insurance account for covering its 650 crore passengers in the year 2007-08.

Last year, it was the Anil Ambani-led Reliance General Insurance Company Limited which had bagged the cover for Rs 39.15 crore.

This year, after battling out with at least five other private players, ICICI Lombard emerged as the lowest bidder for covering railway passengers with its bid of just Rs 0.0475 per person – amounting to Rs 34.35 crore as premium; something that industry experts have termed as a bargain for the railways.

When contacted, an ICICI Lombard spokesperson confirmed that it had been awarded the railway insurance cover for the next one year, beginning from September 20, 2007 to September 19, 2008.

Public sector firms – United India Insurance, New India Assurance, Oriental Insurance and National Insurance – along with Reliance General were also in the race for this cover, with their individual bids ranging from Rs 38 crore to Rs 74 crore.


‘All IRDA norms fulfiled’
Mumbai Mirror had reported in its September 13 issue in an article titled ‘Is ICICI Lombard going off-track for railways?’ on how the insurance company, in its bid, had not capped its overall liability for any one accident – or for any one year – to cover the lives of 1.60 crore passengers who travel daily on some 7,000-odd trains.

This was contrary to the bids submitted by other insurance companies who had capped their aggregate liability for any one accident to Rs 25 crore, and the overall total liability in the entire year to Rs 80 crore. Even reinsurance of the mega-cover was missing.

Commenting on the same, the spokesperson asserted that ICICI Lombard has appropriate reinsurance back-up and other requisites as per IRDA norms, but declined to divulge its specifics.


So what will passengers get?
Indian Railways have insured all rail passengers against death or injury in train ‘accidents’ as defined under Section 124 of the Railways Act, 1989.

Similarly all rail passengers and platform ticket holders are also insured against death or injury on account of ‘untoward’ incidents as defined under Section 124A of the Act.

Untoward incidents include death or injury on account of a terrorist act or any violent attacks, robbery, dacoity, rioting, shootout, arson by any person in or on any train carrying passengers or in the waiting hall, cloak room, reservation or booking office or on any platform or in any other place within the premises of railway station, an industry expert explained.

The source, who is close to the development, further revealed that ICICI Lombard has extended a liability of up to Rs 4 lakh per passenger, paid in accordance with the seriousness of an injury, or death, as mentioned in the Railways Act, for the estimated 650 crore passengers travelling by Indian railways this year.

Compensation for death or permanent disability is Rs 4 lakh.

In case of injuries, the minimum amount is Rs 32,000 and maximum is Rs 3.60 lakhs, according to the seriousness of injury sustained.


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