Two preliminary enquiry instituted into alleged conspiracy

The Central Bureau of Investigation has instituted two Preliminary Enquiries (PEs) into suspected conspiracy between unknown officials of ICICI Lombard, the Rajasthan government and the Union Agriculture and Textiles Ministries, to draw undue benefits under the Centrally-funded insurance schemes by showing false enrolments of farmers and artisans.

The first PE pertains to the Weather-Based Crop Insurance Scheme (WBCIS), under which ICICI Lombard insured crops. The farmers were required to pay 20 per cent of the premium and the remaining had to be borne by the Rajasthan Agriculture department and the Union Agriculture Ministry.

According to the CBI, enrolments of about 2,100 ghost farmers were allegedly made by unknown officials of the company, for which it obtained 80 per cent share of the gross premium amount from the government. However, the company has denied any wrongdoing. The data is only for Ganganagar district in 2009-10.

Another PE has been registered in connection with the Rajiv Gandhi Shilpi Swasthya Yojna (RGSSBY) under which the company is suspected to have enrolled 11,000 fictitious artisans.

“The two inquiries have been initiated on the basis of a thorough probe by the Insurance Regulatory and Development Authority. The matter came to light after the company made a claim of Rs.13 crore under WBCIS. Of the 3,158 enrolled farmers, 2,093 farmers were found non-existent. The company had also started settling the claims by issuing cheques to fictitious insurers. The company later claimed that all cheques had been encashed,” alleged a CBI official, adding that the complaint alleges that ICICI Lombard had made payments of Rs.14.37 crore as against the premium amount of Rs.6.42 crore.

Another health insurance scheme of the company is under the CBI scanner as those not meeting the eligibility criteria were fraudulently enrolled, it is alleged.

Last September, The Hindu reported the alleged irregularities in the delivery of the insurance and health schemes for farmers and artisans by ICICI Lombard, stating that departmental inquiries had established that the company had “floated ghost beneficiaries under various welfare schemes of the Textiles Ministry, the Rashtriya Swasthya Bima Yojana (RSBY) and WBCIS of the Agriculture Ministry.”

ICICI Lombard was awarded the contract to implement the government schemes — RGSSBY, RSBY, WBCIS and the Comprehensive Health Insurance Scheme through competitive bidding.

The issue was first brought to light by a company whistleblower in January 2011.