Shriram General Insurance Company (SGIC) has received a favourable verdict from the Madhya Pradesh High Court in a contested motor accident claim, with the court identifying irregularities suggesting coordinated fraud.
The court’s directive includes the formation of a Special Investigation Team (SIT) to examine the alleged involvement of medical professionals, lawyers, and law enforcement in similar cases.
The legal dispute arose from a compensation claim filed by an individual named Rakesh Valtiya, who reported injuries sustained in a road accident involving a goods vehicle.
SGIC challenged the authenticity of the submitted documentation, including a disability certificate and hospital discharge records.
Upon review, the court determined that the disability assessment had been issued without a physical examination, while the hospital discharge papers were attributed to a facility the named physician did not work at. The dates of admission and discharge also failed to align with the accompanying hospital bills, raising concerns about document tampering.
During the proceedings, the claimant acknowledged that he had not received treatment at the hospital listed in the documents and that the medical paperwork had been arranged through his legal representative. Based on these admissions, the court concluded that the claim had been falsely constructed with the intention to defraud the insurer.
Following its assessment, the court recommended disciplinary action against two medical professionals – Dr Sharad Dwivedi and Dr Balkrishna Dang – by relevant health authorities.
The court also instructed the State Bar Council to investigate the conduct of the claimant’s lawyer, advocate Manoj Shivhare, for his role in facilitating the forged documents.
The total compensation was adjusted downward by ₹52,053, revising the final award to ₹2,22,043. SGIC had originally appealed against a tribunal’s order granting ₹2,74,096 in damages.
Commenting on the judgment, SGIC executive director Ashwani Dhanawat said the outcome highlights the importance of verifying claims.
“This outcome is a testament to our ongoing efforts to safeguard policyholders and ensure the long-term stability of the state’s insurance system. As stewards of both policyholder and shareholder funds, we bear the responsibility of ensuring these resources are allocated to legitimate claims. This reinforces our commitment to a robust claims management framework, which is focused on identifying and preventing fraud while ensuring that our resources are directed towards those policyholders who genuinely require protection,” he said.
He added that the decision also reflects the need for ethical conduct among professionals involved in claims evaluation.
“The High Court’s ruling underscores the critical importance of maintaining the highest standards of professional ethics and strict adherence to medical guidelines in the assessment and certification of disabilities. This decision serves as an important reminder that both the legal and medical professions must work collaboratively to uphold the values of integrity, transparency, and public trust,” Dhanawat said.
The High Court’s decision to initiate an SIT signals broader concerns about the systemic nature of such fraudulent practices in motor claims. The SIT is expected to identify patterns of misconduct involving coordination between claimants, legal practitioners, and medical staff.
This development follows similar concerns highlighted in the 2024 Global Claims Fraud Survey by Reinsurance Group of America (RGA), which reported an uptick or steady rate in fraud cases, according to 74% of surveyed insurance professionals.
The study, which focused on the life and health insurance sectors, identified fraudulent activity as a persistent challenge during both underwriting and claims stages.
Most respondents pointed to consumers as the leading source of fraud, followed by agents and doctors who may assist in falsifying documentation. Internal risks from within the insurance sector were also flagged by a portion of respondents.
Fraudulent claims were shown to significantly increase processing timelines. While standard claims are resolved in approximately three weeks, those under fraud investigation may take over two months. Despite the impact, insurers often choose to deny fraudulent claims without legal escalation, citing complexities in legal proceedings and potential brand risks.
