J&K Govt blacklists Reliance General Insurance over lapses

The Jammu and Kashmir Government has blacklisted Reliance General Insurance Company Limited (RGICL) for two years, barring it from all bidding and procurement processes in the Union Territory over serious contractual lapses and financial irregularities in a Group Mediclaim Insurance Scheme.

The action, formalised through an order issued by the Finance Department’s Insurance Section, follows a detailed scrutiny of the insurer’s role in the scheme launched in 2018 for government employees and pensioners.

Officials said the decision aims to enforce accountability and protect public funds.

The scheme had been rolled out under a tripartite agreement signed on October 15, 2018, involving the Government, M/s Trinity Reinsurance Brokers Limited as broker, and RGICL as insurer. The Government paid premiums exceeding Rs 61.43 crore for around 3.5 lakh employees and Rs 66.95 lakh for 1,506 pensioners.

However, the scheme soon drew widespread criticism from beneficiaries over poor implementation, forcing the Government to terminate the contract within months. The agreement was discontinued with effect from December 31, 2018.

Investigations by the Anti-Corruption Bureau (ACB) revealed that claims worth Rs 17.25 crore were settled for 3,344 beneficiaries, while Rs 44.85 crore remained as unutilized premium. The ACB recommended recovery of the amount from the insurer as per contractual provisions.

The Government order cited multiple deficiencies on the part of RGICL, including failure to issue health insurance cards and enrolment kits, absence of empanelled hospital lists, non-establishment of district-level kiosks and coordination offices, and lack of a functional web-based platform, MIS system, and dedicated call centre for beneficiaries.

The case has also been probed by central agencies, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). In a complaint before a Special Court in Srinagar in June 2025, the ED alleged that the insurer, in collusion with the broker, manipulated processes and diverted funds, invoking provisions of the Prevention of Money Laundering Act.

A show-cause notice issued to the company in May 2025 drew an unsatisfactory response, prompting the Government to proceed with punitive action. Authorities clarified that ongoing arbitration proceedings do not restrict administrative measures taken in the public interest.

The blacklisting order will come into effect after 15 days, in line with the directions of the Arbitral Tribunal, allowing the company an opportunity to pursue legal remedies.