J&K Governor Satya Pal Malik has cancelled the Group Mediclaim Insurance Policy of over 40,000 government employees and pensioners of the state after reportedly admitting that the policy was a "fraud".
The insurance worth Rs 20,000 crore was allotted to Anil Ambani-led Reliance General Insurance and was implemented throughout the state from October 1. The previous Governor, NN Vohra, had withheld the implementation of the order after some discrepancies were found.
The J&K Governor said that the Chief Secretary conducted a probe and decided to cancel the policy.
According to reports, the whole process of the insurance policy allotment was a hush-hush affair. While the official tenders of the policy were not uploaded on the government website, which usually is the norm, the bidding of tenders was also not done publicly.
The criteria for the allotment of tenders was also changed from a J&K-based insurance company with a turnover of Rs 5,000 crore to any insurance company with a turnover of Rs 3,000-4,000 crore.
Reports suggest that the same was done to suit a particular company.
In an interview with a local daily, Malik said that more government employees were included under the policy to raise the amount.
The uproar over the health insurance policy was first raised by the Employees Joint Action Committee, who described it as an additional burden on the employees serving across government departments, autonomous bodies and educational institutions.
According to EJAC, the annual premium of Rs 5,176 paid by a government employee and Rs 22,000 by a pensioner is too much to ask.
The policy provided for an insurance cover of up to Rs 6 lakh for the employee and five of his family members across various hospitals in the country.
However, the employees say that the policy is beneficial only if the employee or the family member is hospitalised.
