A parasite, ICICI Lombard chose Centre’s schemes to suck govt money

Forgery and ICICI Lombard General Insurance Company Ltd, it seems, go hand in hand.

In the course of its investigation, DNA found that the company had cheated the government of crores not just under the Rajiv Gandhi Shilpi Swasthya Bima Yojna, but also under a weather insurance scheme for farmers, a health insurance scheme for weavers and the Rashtriya Swasthya Bima Yojana for poor people.

Also, the company’s ‘internal control and loss minimisation department’ had discovered in 2010 that at least 2,093 bogus farmers in Rajasthan’s Ganganagar district had been enrolled under the Weather-Based Crop Insurance Scheme (WBCIS).

The Union agriculture ministry funds the scheme (pays the premium), aimed at acting as an indemnity for losses that may arise due to abnormal weather conditions such as excess or scant rainfall, variations in temperature, wind speed and humidity.

The department report also spoke of a particular agent who had enrolled 1,807 of the 2,093 bogus farmers. The matter came to the fore when the Rajasthan government in October 12, 2010, warned the company of legal action for withholding claims.

ICICI Lombard on October 19, 2010, wrote to the joint director of Rajasthan’s agriculture department that the “total amount involved here is about Rs15 crore”. “With respect to Ganganagar and Phalodi, Jodhpur, the internal team of ICICI Lombard came across certain irregularities in the field. It was found that in many of these cases (2,093), there was no agriculture activities carried out by the beneficiaries enrolled under the scheme.”

Though the company highlighted that “there was no agriculture activities carried out by the beneficiaries enrolled”, it suppressed the fact these beneficiaries were bogus.

Why did it do so? The only plausible reason that comes to mind is the company did not want the government to know. For if it did, it could have questioned the entire enrolment under the WBCIS 

During a field survey, it was seen that insured farmlands, in reality, belonged to other farmers. Expectedly, they were angry. They demanded answers from the company.

Now, if this has happened in a district during a particular season, one can well imagine how much the government would have had lost in premiums, and the company gained, because of fictitious data. 

DNA found such violations are common across districts in Rajasthan. In Kota, the addresses of 77 insured farmers were non-existent. In Barmer, Jodhpur, and Jaisalmer, at least 105 farmers in 2010 got policies, based on forged records.

In Haryana’s Hissar district, of the 617 farmers enrolled under the WBCIS, 82 were bogus and 142 were untraceable.

Deepak Srivastava, associate vice-president, HR, ICICI Lombard, told DNA that the company had investigated the matter after receiving hundreds of complaints about bogus people being enrolled under the WBCIS in Rajasthan. “The ICICI management hushed up the investigation report that had indicted several of its top-ranking officials,” he said.

ICICI Lombard’s forgery does not end with bogus farmers. DNA found that company officials in West Bengal siphoned off government money meant for the health insurance scheme for handloom weavers.

The Union government, in collaboration with ICICI Lombard, had introduced the scheme in November 2005 to bear the medical expenses of weavers.

In March 2010, Srivastava as the national manager of ICICI Lombard’s fraud control unit, wrote to the Enforcement Directorate’s (ED) Bengal branch detailing how exactly some ICICI Lombard employees siphoned off the entire money.

An investigation showed the government had released funds for at least 2,000 weavers between July 2008 and March 2009. But a couple of ICICI Lombard employees had diverted the entire fund to the United Bank of India (Basirhat, West Bengal) accounts of two people — Abul Kalam Mondal and Ahamed Ali Mondal — who might be non-existent.

In his letter, Srivastava said the money lost could go up to almost Rs75 lakh. And such cases can be found across the state, he said. “We found only two such dummy accounts… Further investigations will surely reveal several such accounts across districts,” he said.

An FIR was registered at the Bhavani Bhavan in Kolkata based on Srivastava’s letter. Subsequently several people, including ICICI Lombard employees, were arrested. Investigations, once again, showed that bogus people were enrolled to increase premium collection from the government.

DNA found that the company is still to provide the ED with the address details of beneficiaries under the scheme.

ICICI Lombard, DNA found, chose almost every insurance scheme where the Centre is involved to siphon off government money. The records of hundreds of beneficiaries under the Rashtriya Swasthya Bima Yojna (RSBY) — a flagship insurance scheme of the UPA government to provide the poor with basic health cover — in Uttar Pradesh’s Allahabad, Gorakhpur, Jaunpur and Sant Ravidas Nagar districts are either incomplete or incorrect.

Here, too, the company started an investigation into the matter following multiple complaints, but did not take any action. It appointed Helix, a forensic experts company in Mumbai, in November 2011 to verify if the holders of biometric cards — issued by the company — in UP did exist. The Helix report had said there were “high possibilities of fraud in the RSBY cards”.

Srivastava said the company brushed the report aside. “Since the company did not take any action, I approached the CBI. But nothing happened,” he said. 

Failing to get any response from the CBI, Srivastava filed a public interest litigation against the company in the Bombay high court in April this year. 

The court, however, asked him to file his PIL in the Rajasthan high court as most of the incidents have happened there.

ICICI Lombard refused to tell DNA anything because “the matter is sub-judice”.