CA Amresh Vashisht
A Chartered Accountant can be insurer surveyor & loss assessor. So in addition to the traditional fields of Statutory Audit, Internal Audit and Tax Audit there is vast scope for CAs in providing such services to the upcoming insurance sector .He can provide the services as Surveyors, Loss Assessors, Claim Assurors, Claim Negotiators etc. The scope of Chartered accountant services to insurance sector is going bigger and bigger and it is the Chartered Accountants who have to take the compensatory steps to reach out at the vast insurance sector. Surveyors are independent professionals licensed by IRDA. They usually function only in non life business. Their job is to assess the actual loss and avoid false claims. Surveyors are not employees, but are independent professionals hired by the insurance company.
THE REGULATORS – INSURANCE REGULATORY DEVELOPMENT AUTHORITY
Section 64 UM of the Insurance Act, 1938, mandates licensing of Surveyors and Loss Assessors (SLA) for settlement of losses above Rs.20000/- reported under a policy of general insurance. Further, the said section has also laid down the qualification requirements for grant of licence to act as SLA. IRDA Surveyor Regulations, 2000 & IRDA Surveyors (Amendment) Regulations, 2013 , The enactment of IRDA Act 1999, authorized IRDA to licence eligible persons to act as Surveyor and Loss Assessors (SLA). IRDA framed the Insurance Surveyors & Loss Assessors (Licensing, professional requirements & code of conduct) Regulations 2000 under powers vested under Section 42D, 64 UM and 114A of the Insurance Act, 1938 and section 26 of IRDA Act, 1999.
CA IS ELIGIBLE TO ACT AS INSURANCE SURVEYOR & LOSS ASSESSOR
An associate member or a fellow member of the Institute of Chartered Accountants of India is eligible to secure the licence to act as Surveyor & Loss assessor. No permission is required from the Institute of Chartered accountants of India before or after procuring such licence. This is in view of the decision of the Council taken at its 196th meeting held in December, 1998 that a member of the Institute does not have to seek the specific permission of the Council to act as a surveyor and loss assessor as general permission has been granted in this regard.
ICAI LAUNCHED A CERTIFICATE COURSE ON INSURANCE
The Committee on Insurance has also developed a post-qualification course on Insurance and Risk Management (IRM) to arm the CAs with insurance industry specific knowledge. That course is related to the auditing of the Insurance Sector but gives a considerable light over the insurance surveyor and the loss assessor field. This course is in view of Section 12 of the Insurance Act, 1938 which provides that the financial statements of every insurer are required to be audited annually by an auditor unless they are subject to audit under Indian Companies Act. Among the public sector insurance companies, Section 25 of the Life Insurance Corporation Act, 1956, dealing with ‘Audit’ is specific about the appointment of auditors of the Corporation with the previous approval of the Central Government. The audits of the General Insurance companies are regulated through Section 619 of the Companies Act, 1956 which prescribes appointment of statutory auditors by CAG.
STATUTORY REQUIREMENT TO HAVE A SURVEYOR
The section 64UM (2) of the Insurance Act 1938 provides that no claim in respect of a loss which has occurred in India and requiring to be paid or settled in India for an amount of Rs. 20,000/- or more in value on any policy of general insurance, unless otherwise directed by the Authority, be admitted for payment or settled by an insurer unless he has obtained a report, on the loss that has occurred from an approved Surveyor and Loss Assessor.
The said regulations, specifies the eligibility criteria, training and examination requirements for grant of licence to applicants to act as Surveyor and Loss Assessors. The said regulations also specify the Duties and Responsibilities & Code of Conduct for surveyors licensed by IRDA. The Code of Conduct specifies the professional and ethical requirements for conduct of their professional work. It elaborates on the code which, inter alia, stipulates that a surveyor and loss assessor shall behave ethically and with integrity in professional pursuits, shall strive for objectivity in professional and business judgment, act impartially when acting on instructions from an insurer in relation to a policyholder’s claim under a policy issued by that insurer, conduct himself with courtesy and consideration to all people with whom he comes into contact during the course of his work.
DISQUALIFICATION TO ACT AS SURVEYOR OR LOSS ASSESSOR
Section 42 (4) of the Insurance Act 1938 enumerates the following as disqualifications:
a) that the person is a minor.
b) that he is found to be of unsound mind by a Court of competent jurisdiction;
c) that he has been found guilty of criminal misappropriation or criminal breach of trust or cheating or forgery or an abetment of or attempt to commit any such offence by a Court of competent jurisdiction:
[Provided that where at least five years have elapsed since the completion of the sentence imposed on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that his conviction shall cease to operate as a disqualification under this clause;]
d) that in the course of any judicial proceeding relating to any policy of insurance or the winding up of an insurance company or in the course of an investigation of the affairs of an insurer it has been found that he has been guilty of or has knowingly participated in or connived at any fraud, dishonesty or misrepresentation against an insurer or an insured.
e) [that he does not possess the requisite qualifications and practical training for a period not exceeding twelve months, as may be specified by the regulations made by the Authority in this behalf;
f) that he has not passed such examination as may be specified by the regulations made by the Authority in this behalf;
Provided that a person who had been issued a licence under sub-section (1) of this section or subsection (1) of section 64UM shall not be required to possess the requisite qualifications, practical training and pass such examination as required by clauses (e) and (f)
g) that he violates the code of conduct as may be specified by the regulations made by the Authority.]
ISSUING POLICY OF THE AUTHORITY
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 categorization;
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.
The Authority on being satisfied that the applicant is eligible for grant of license, shall grant the same in FORM-IRDA-2-LF as given in the Schedule of the regulations and send an intimation to the applicant together with an identity card mentioning the particular class or category of general insurance business for chartered accountants. The Authority specific issues a licence for the category and the licence shall remain valid for a period of five years from the date of issue thereof, unless cancelled earlier.
a. An applicant seeking a licence to act as a surveyor and loss assessor shall undergo a period of practical training of not less than twelve months with a surveyor and loss assessor as specified below;
b. The surveyor under whom an applicant will be trained shall belong to category A or category B as classified by the Authority while granting a licence;
c. The trainee shall maintain a record of training received during the period and shall get it certified by the surveyor and loss assessor under whom he has trained and the certificate shall be attached to the application for seeking grant of a licence under regulation 3;
d. The licence to be granted to an applicant to act as a surveyor and loss assessor shall be in that particular area for which he has been trained;
e. If a surveyor and loss assessor already licensed by the Authority seeks to obtain a similar licence for acting as a surveyor in a category other than for which he is licensed, he shall undergo a period of training not less than six months under a surveyor and loss assessor holding either Category A or Category B licence issued by the Authority to act in that particular area.
f. The Authority may also prescribe the passing by an applicant of an examination on the successful completion of the training prescribed above for the grant of a licence under Regulation 3. The examination may be conducted either by the Authority itself or by an institution authorised by it in this behalf.
CATEGORISATION OF LICENCEES
Any person wishing to become a surveyor must pass an IRDA exam, get training for one year under A or B category surveyor for one year and get himself categorized as per IRDA norms. There are 3 categories of surveyor A, B, C. The categories are being awarded by IRDA depending upon the experience. A surveyor can work with any number of insurance companies.
|DEPARTMENT||CATEGORY A||CATEGORY B||CATEGORY C|
|LOP||Above Rs. 50 Lakhs||Upto Rs. 50 Lakhs||Nil|
|FIRE ( Flood ,Cyclone ,Earthquake )||Above Rs. 20 Lakhs||Upto Rs. 20 Lakhs||Upto Rs. 5 Lakhs|
|ENGINEERING||Above Rs. 7.5 Lakhs||Upto Rs. 7.5 Lakhs||Upto Rs. 2 Lakhs|
|MOTOR(Public, Private)||Above Rs. 2 Lakhs||Upto Rs. 2 Lakhs||Upto Rs. 1 Lakh|
|MISCELLANEOUS (inclusive non-tariff)||Above Rs. 7.5 Lakhs||Upto Rs. 7.5 Lakhs||Upto Rs. 3 Lakhs|
|MARINE CARGO||Above Rs.7.5 Lakhs||Upto Rs.7.5 Lakhs||Upto Rs. 3 Lakh|
|MARINE HULL||Above Rs. 20 Lakhs||Upto Rs. 10 Lakhs||Upto Rs. 50,000|
HOW TO APPLY FOR A LICENCE:
The following are the documents to be submitted for grant of licence to an individual to act as Surveyor and Loss Assessor:
It is possible for an applicant to submit his application for grant of surveyor licence through an online portal i.e. email@example.com (link available from www.irda.gov.in ) and upload all required documents in the portal in soft form. The said portal provides an end to end solution and enables the applicant to know the status of application from submission till its approval and grant of licence by IRDA. http://www.irda.gov.in/ADMINCMS/cms/Search_Results.aspx
The application complete in all respect along with bank draft and the certificates attested by a Magistrate or a Notary Public should be forwarded by the applicant to the following address by Registered Post’
The Insurance Regulatory and Development Authority
Gate No. 3, First Floor, Jeevan Tara Building,
Sansad Marg, New Delhi – 110 001
Tel. No. 3364711.
PROCEDURE FOR OBTAINING LICENSE
(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 IRDA for grant of licence in FORM-IRDA-1-AF
(2) Where the applicant is a company or firm (in FORM-IRDA-3-AF), the IRDA shall be satisfied that all the directors or partners, as the case may be, possess one or more of the qualifications specified in section 64UM(1)D(i) of the Act and none of such directors or partners, as the case may be, suffers from any of the disqualifications mentioned in section 42 D of the Act read with Section 42(4) of the Act.
(3) The IRDA shall, before granting license, 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 license. In particular and without prejudice to the foregoing, the IRDA 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 Insurance Act, 1938 and rule 56A of the Insurance Rules, 1939.
(b) Possesses such additional technical qualifications as may be specified by the IRDA from time to time.
(c) Has furnished evidence of payment of fees for grant of license, depending upon the categorization.
(d) Has undergone a period of practical training, not exceeding 12 months, as contained in Chapter VII of these regulations.
(e) Furnishes such additional information as may be required by the IRDA from time to time.
(4) The IRDA on being satisfied that the applicant is eligible for grant of license, 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 IRDA has granted license and the license shall remain valid for a period of five years from the date of issue thereof, unless cancelled earlier.
(5) A surveyor and loss assessor, whose license has been cancelled or suspended for any reason, may submit an application for issuance of license, after the expiry of three years from the date of such cancellation or suspension, and, such an application shall be treated as a fresh case, and, accordingly, the applicant shall satisfy all the requirements of sub-regulation (2).
(6) A surveyor and loss assessor shall be subject to categorisation as specified in Chapter V of these regulations.
(7) A license 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.
On and from May 1, 2001, the fee payable to the IRDA by fresh applicants for grant of license to act as surveyors and loss assessors, category wise, shall be as stated in the following table:
|S.No||Category||Amount Payable- Individual||Amount Payable- Corporate|
After getting licence the surveyor cum loss assessor has to apply for empanelment with a copy of licence to all the Private & Public sector insurance companies. Though the panel of surveyors is maintained at the concerned Regional Offices application may be sent to the Divisional offices also.
Since the Chartered Accountants, in the normal course, are eligible to conduct survey for claims relating to policies issued under ‘Miscellaneous’ category (unless they have passed any technical examinations) they will be empanelled for MISCELLANEOUS polices only.