Jammu and Kashmir Governor Satya Pal Malik has ordered the cancellation of the J&K Group Mediclaim Insurance Policy for Employees and Pensioners as the tenders were allotted fraudulently.
“We are probing this. The tender was invited by some other company, not the government. We are giving this to vigilance and whosoever is involved, whether an official or a businessman, will not be spared,” Malik told.
On September 20, days after Malik assumed office, the contract for providing insurance to 3.5 lakh regular employees of the state was awarded to private sector general insurance company. The annual premium for employees and for pensioners was Rs 8,777 and Rs 22,229, respectively. It was mandatory for all state government employees – gazetted and non-gazetted, state universities, commissions, autonomous bodies and PSUs to subscribe to the policy.
According to sources, the Trinity Group had floated the tenders on behalf of the government. “Changes were made to the conditions by this front to accommodate private sector general insurance company,” sources said.
When contacted, Finance Secretary Naveen Choudhary, told The Indian Express, “Trinity came through a bidding process as a transaction advisor, and as a third party interface for grievance redressal. This a standard practice to avoid mistakes since government officials do not have requisite expertise in handling insurance related queries.” He said that the total cost of the group insurance schemes was estimated at Rs 280 crore, of which Rs 60 crore was paid as advance on premium.
Sources in the Governor’s office said red flags were raised over an advance payment of Rs 60 crore made to the company by the state’s finance department through the office of the Finance Secretary. This payment, the sources claimed, was “without the necessary approvals of the Chief Secretary or the Governor”. “The order to cancel the current scheme has been typed and signed and will be issued soon,” the source said.
Malik said many employees resisted subscribing to the policy citing high premium. “This led me to study the files again. I came to the conclusion that there were issues with the scheme.”
