THE ORIENTAL INSURANCE COMPANY LIMITED HEAD OFFICE CIRCULAR DEPTT: Technical Circular No.:HO/DGM(T)/115/2007/CR-6214

30 November 2007

To: All ROs/CMD Sectt./Reins. Treaty, Reins. Accounts/IAD/IT Deptt./Marketing Deptt./Accounts Deptt./OSTC Faridabad/RID/Techno Marketing/Fire & Engg./Marie/Misc./Motor/GUC Re:

1. Higher Survey fees to Surveyors in complicated cases and exaggerated claims/repudiated claims 2. Survey of Property losses under Marine & Misc. Policies

1. We invite your attention to Head Office Circular No.HO/DGM(T)/101/2007/CR6143 dated 31st January, 2007 and enclosed Survey fee guidelines effective from 1.2.2007 as approved by GIPSA Board. As per Para 3, Chapter 5 General Provisions applicable to all departments the provision for higher survey fee has been made in case of complicated claims requiring special efforts in assessing the loss. 2. Besides above it is also noted that for some claims Surveyors devote special efforts, professional time and expertise for tactful handling of claims which are highly exaggerated. Here Surveyors put extra efforts in extracting factual and correct position of the claim or even obtaining clinching evidence in support of establishing the exaggerated nature or false nature of the claim wherever the facts are such. 3. In above exaggerated claims or false claims the subsequent action result into 3.1 the claim is repudiated but the Surveyors carry out assessment of loss. This assessment is usually much lower than the claimed amount. It is done as an abundant precaution so that if tomorrow the case goes to the court and court judgement goes against us then liability is fixed as per the loss assessment done by the Surveyors and not as claimed. OR 3.2 the assessment done is agreed by the client and the loss is settled as full and final but for a much lower amount than claimed. 4. In both the above cases, if fees is paid as per fee schedule approved by the GIPSA Board the fees is very low and the surveyor feels invariably that his special efforts in extracting the correct and true position is not compensated and feels rather de motivated.

Even if fee is considered on 200% basis on the such lower assessed loss even then the fees does not appear to be commensurate with the efforts done in extracting the correct and true position of the claim. 5. BASIS OF HIGHER FEE -To motivate the Surveyors and expecting them to

devote special efforts and extra time and use of tactful expertise it has been decided to pay higher fees in case of exaggerated claims or false claims upto the amount worked out as under: 5.1 Fees as per the amount claimed as per following percentages I. Upto Rs. 50 lacs II. 50 lacs to 1 crs iii. 1cr to 5 cr iv. Above Rs.5 crs

- 1% of the claim amount - Rs. 50,000 + 0.75% on balance above 50 lacs - Rs. 87,500 + 0.35% on balance above Rs.1 cr - Rs.2,27,500 + 0.10% on balance amount above Rs. 5 crs (not exceeding Rs. 6 lacs)

5.2 200% of the fees on loss assessed 5.3 Fees payable on number of days devoted in survey and assessment taken per day fee for Rs.4000/Rs.3000/Rs.2000 for Category ‘A’/Category ‘B’/Category ‘C’ Surveyor Whichever is higher 6. COMPETENT AUTHORITY - The Competent Authority to consider higher fees

for exaggerated and or false claims will be Regional Incharge for claims falling within the authority of BO/DO/RO and General Manager (Tech) for claims falling within the authority of Head Office. 7. The above mentioned fees criteria is to be taken as a guiding factor and higher fees upto a maximum amount as per above is to be decided by the Competent Authority depending upon the merits of each case. A list of all such approvals made by Regional Head should be sent to the General Manager, Technical for information on a monthly basis. 8. The decision should be taken with the objective to motivate the Surveyors to extract the correct and true situation under exaggerated or false claims. 9. SURVEY OF PROPERTY LOSS UNDER MARINE & MISC. POLICIES – It has been observed that survey of property losses due to Fire, Flood, storm or other Acts of God involves as much efforts by the Surveyors as survey of such losses in Fire Policies. Depending on the merits of the case, the Competent Authority approving the claim may approve Survey fee in such cases as per fee schedule applicable to “Fire & Engineering” class of survey. The objective is to pay fee commensurate with the efforts involved in the survey and reporting true and fair view in the Survey report.

(NIRAJ KUMAR) GENERAL MANAGER