A Written Appointment, an Undisclosed Prior Valuation and an 'Expediting Fee'
On 3 March a claims manager of a general insurer telephones a surveyor licensed in Category A and asks him to survey a fire loss at a hotel in Coimbatore. The claim was intimated on 27 February; the insurer estimates the loss at about Rs 62 lakh and has issued no written appointment. At the site on 5 March the surveyor realises that eight months earlier he had prepared a property valuation report for the same hotel, for which the hotel paid him Rs 45,000 directly. The hotel's managing director now offers him a further Rs 1 lakh 'expediting fee' if the report is submitted within ten days, and asks him to recommend a contractor and to supervise the repairs. The claims manager says the insured has complained to the insurer's grievance cell and that 'a helpful report will calm things down'. The manager also asks him to adopt the insured's purchase invoices as the stock figure without further verification.
1. Identify every regulatory and ethical problem in this instruction and state what the surveyor must do before accepting the assignment.
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Four separate problems, each with its own cure.
1. Prior paid engagement with the insured. The earlier valuation, paid for by the hotel, creates a relationship that a reasonable observer could read as a stake in the outcome. The surveyor must disclose it to the insurer in writing before accepting, and must decline the assignment if the insurer or he considers his independence impaired. Silence is the breach, not the earlier work itself.
2. Fee from the insured. A licensed surveyor is appointed and remunerated by the insurer. Accepting an 'expediting fee' from the insured, or negotiating directly with the insured, is a code-of-conduct breach and destroys the evidential value of the report. He must refuse and record the offer.
3. Repair supervision and contractor referral. A surveyor cannot assess the loss and then earn from repairing it. Recommending a contractor and supervising reinstatement for the same loss puts him on both sides of the transaction and is prohibited. He must decline and say why.
4. 'A helpful report'. This is an inducement to tailor findings to a complaint. He must tell the insurer plainly that the report will state what the evidence shows, favourable or not, and report the request.
He should also insist on a written appointment, since the 30-day reporting period runs from the date of appointment, not from the telephone call.
2. The insurer wants the report in ten days and wants the invoices adopted as the stock figure. How should the surveyor respond, and what does the regulatory framework actually require?
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On the timeline. The regulated outer limit is 30 days from appointment. A shorter internal target is not unlawful, but it cannot override the duty to produce a properly evidenced report. The correct response is to accept the target conditionally: write to the insurer listing the records needed (stock registers, GST returns, bank stock statements, purchase and sale invoices, salvage reconciliation) and stating that the ten-day target is achievable only if those records are produced by a stated date. If they are not, file an interim report within the period recording what was done, what is pending and why, so that the delay is documented rather than appearing as the surveyor's default.
On the invoices. Purchase invoices prove acquisition, not that the goods were in the godown at the moment of the fire. To establish the stock at risk he needs: the stock register and its physical reconciliation, GST returns through the last filing period, the stock statement lodged with the bank, consumption/sales records, and a physical count of burnt residue and intact bales by count and weight. Adopting invoices uncritically would overstate or understate the loss and would be indefensible if the claim is later questioned.
He should also test for average: sum insured against the value actually at risk, not against the figure the insured asserts.
3. What must the report record about dates and about the earlier valuation, and why does this matter for the insured's grievance complaint?
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The date trail is the report's spine. Record: date of loss, date of intimation to the insurer, date of written appointment, date of first inspection, dates on which each document was sought and received, dates of joint inspection and salvage valuation, and the reason for any interval. If the insurer appointed late, say so; if the insured delayed producing records, say so with dates. The surveyor controls only his own segment of the timeline, and the report should show exactly where that segment begins and ends.
Declare the earlier engagement. The report should contain a short independence declaration: the prior valuation, the fee paid by the insured, the fact that the insurer was informed, and the fact that the repair-supervision request and the expediting fee were declined. This is not self-flagellation; it is the record that answers any later allegation of bias, and it protects the insurer's settlement if the insured's complaint is escalated.
Why it matters. A grievance or ombudsman review turns on two questions: was the claim handled within the timelines, and was the assessment independent? A report that shows a clean, dated, disclosed process answers both on its face. A report with missing dates and a hidden past relationship invites the inference that the assessment was neither prompt nor independent, whatever its technical quality.