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Srinagar, May 20 (UNI) The Jammu and Kashmir government paid Rs 7.70 crore in excess to an insurance company due to injudicious action of a top official in making advance payment without first ascertaining the actual enrollment of employees, according to a CAG report.

The report said the Jammu and Kashmir government in 2003 introduced a mediclaim policy in collaboration with the National Insurance Company Limited with the objective of providing hassle free access to modern healthcare facilities to its employees.

The scheme -- Government Employees Mediclaim Policy -- was also introduced to reduce the financial burden of the state government on account of employee's medical reimbursement claims, it added.

The scheme was optional and the government employees were asked to opt out of it if they want by conveying their unwillingness in writing to their drawing and disbursing officers by July 28, 2003.

The report said all option forms were to be furnished to the state Finance Department by August 14, 2003.

The first annual premium of Rs 1,400 payable to the National Insurance Company for each employee was subsidised by the state government to the extent of Rs 350 in case of gazetted and Rs 700 for non-gazetted officials, it added.

Test check of the records of the Commissioner-Secretary Finance in December 2005 revealed that 19,985 employees opted for the scheme for which an amount of Rs 2.80 crore was to be paid, the CAG said.

However, the Finance Department advanced an amount of Rs 10.50 crore to the National Insurance Company on August 14, 2003 on account of premium of 75,000 employees at the rate of Rs 1,400 each for one year, it added.

The report said the Additional Secretary, Finance Department, stated in December 2005 that the matter regarding refund of the excess payment had been taken up with the National Insurance Company through a legal notice.

The Commissioner-Secretary, Finance Department, had stated in June 2006 that the National Insurance Company reneged on its commitment to refund the excess premium and the Law Department advised to settle the issue through arbitration, it said, adding the further action taken was awaited till November 2006.

The CAG said the action of the Commissioner-Secretary, Finance Department, in making the advance payment without first ascertaining the actual enrollment under the scheme resulted in excess payment of Rs 7.70 crore to the National Insurance Company.

UNI