Thiruvananthapuram: The Central Bureau of Investigation (CBI) has found that the branch office of a public sector insurance company in Kerala had sold an estimated 19,000 third party insurance policies to vehicle owners during 2005-2006 at less than the Union Government-approved tariff.

The CBI has booked C.C. Rajappan, assistant manager, New India Assurance, Muvattupuzha branch office, on the charge of violating the Prevention of Corruption Act (case number: RC 10/2007). The CBI has registered a second case against Rajappan on the charge of amassing wealth disproportionate to his known sources of income. The CBI raided his houses in Muvattupuzha and Kalady in Ernakulam.

In 2002, the General Insurance Tariff Advisory Committee (TAC) had recommended a sharp increase (between 100 per cent and 300 per cent) in the basic premium for third party insurance cover for vehicles. The increase was recommended because of the rising number of third party insurance claims in the country. The TAC controls and regulates the rates, advantages, terms and conditions offered by insurers for covering fire, marine (hull), motor, engineering and workmen compensation.

Public sector insurance companies in Tamil Nadu started implementing the recommendations in a stringent manner. Commercial vehicle owners in Tamil Nadu were suddenly faced with the prospect of paying more than Rs.18,000 as insurance premium annually for third party cover. The amount was almost double of what they used to pay earlier.

A CBI official said many of them started renewing their third party insurance cover at the old rate with the help of corrupt officials in certain public sector insurance company offices in Kerala. A large group of middlemen facilitated the racket, he said.

The CBI has found that the middlemen paid Rs.500 as bribe for renewing a third party policy. For renewing an expired policy, the rate was Rs.700, he said. The agency is also investigating certain officials attached to the New India Assurance offices in Neyyatinkara, Palakkad (Divisional Office), Munnar and Chittoor in connection with the racket. Superintendent of Police, CBI, T. Vikram is heading the investigation.

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