INDIA Law and Practice Contributed by: Neeraj Tuli, Celia Jenkins and Rajat Taimni, Tuli & Co
The Consumer Protection Act gives the court discre- tion to refer the dispute to mediation with the parties’ consent if there are elements of the settlement that may be acceptable to them (except in matters relating to criminal and non-compoundable offences, fraud, medical negligence, etc). Pursuant to this, the Indian government has also issued the Consumer Protection Mediation Rules 2020. In practice, courts in India are now progressively encouraging parties to explore the possibility of an out-of-court settlement, with a view to ending litiga- tion between them. The courts usually have in-house mediation centres where experienced senior lawyers are appointed as mediators to resolve long-pending disputes. 9.8 Penalties for Late Payment of Claims The Policyholders Regulations prescribe the claims procedure that must be followed by insurers to ensure expeditious processing of claims. These regulations ensure that insurers settle claims promptly. Insurers must pay interest at 2% above the prevailing bank rate when claim payments are delayed. However, the Supreme Court of India has held that the applicability of this rate is not a mandatory rule and that an arbitral tribunal has the discretion to determine the rate of post-award interest as it deems fit. 9.9 Insurers’ Rights of Subrogation There is statutory and judicial recognition of the right of subrogation. In relation to statutes, the Marine Insurance Act 1963 (specifically, Section 79) provides for the insurer’s right to subrogation. Equally, Indian courts have recognised subrogation as an equitable corollary of the principle of indemnity – under which, the rights and remedies of the insured against the wrongdoer are transferred to and vested in the insurer. No separate contractual clause is required to trigger this; however, in practice, policies do also contain subrogation clauses and insurers will frequently obtain “subrogation letters” and an “assignment” of the third- party claim from the insured. The Policyholders Regu- lations also obligate the insured to assist its insurer in recovery proceedings, if the insurer so requires. The Delhi High Court in Fresenius Medical Care Dialysis Service India Pvt Ltd v Kerry Indev Logistics Pvt Ltd
(ARBP 180 of 2022) held that, in cases of subrogation- cum-assignment, the insurer has the right to recover from a third party any amount paid to the insured – although the insured retains the right to recover any excess amount beyond what was paid by the insurer. This arrangement allows the insurer to step into the insured’s shoes to recover the amount paid, but does not prevent the insured from pursuing further recovery beyond that. Thus, subrogation entitles the insurer to recover only to the extent of the indemnity, with any additional recovery going to the insured. In another judgment, the Delhi High Court clarified that, once an insurer steps into the shoes of the insured, the arbitration clause between the insured and a third-party will be binding on the insurer, even though it was not a party to the original agreement. Insurers in India are using insurtech, including applica- tions, AI, telematics, and the internet of things (IoT), to transform their business operations. Key applications of insurtech are detailed below. Websites and Apps Indian insurers and intermediaries are partnering with tech companies to develop websites and mobile applications to facilitate the sale and servicing of insurance policies online. Insurers are also collabo- rating with various tech companies to digitise custom- er verification, underwriting, premium payment and claims-processing functions, as well as to automate the policy-issuance and claims-settlement processes. Health Insurance Health insurers are collaborating with fitness technol- ogy firms to track users’ behaviours and offer insur- ance discounts to those who have a healthier lifestyle. General insurers are collaborating with tech compa- nies to explore IoT solutions to track, inter alia, cargo, theft, hijack attempts, and wastage. 10. Insurtech 10.1 Insurtech Developments
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