An official told KNS the insurer failed to discharge essential contractual obligations under a tripartite agreement signed on October 15, 2018, for a Group Mediclaim Insurance Scheme covering 3.5 lakh government employees and pensioners.
“The reply submitted by the company does not satisfactorily explain or justify the serious lapses and contractual failures attributable to it,” the order said, noting that RGICL had failed to issue health insurance cards, provide lists of empanelled hospitals, establish district-level kiosks, or set up dedicated call centre services as mandated.
The scheme, under which a first premium instalment of over Rs 61 crore was released to RGICL, was terminated within two months on December 31, 2018, following widespread doubts about the contract’s finalisation, sources said.
The Anti-Corruption Bureau (ACB) later found that while the insurer had settled claims of 3,344 employees and pensioners amounting to Rs 17.25 crore, an unutilised premium balance of Rs 44.85 crore remained unrecovered. When served a recovery notice, the company instead demanded over Rs 6 crore as receivable from the government.
Subsequent investigations by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) led to registration of FIRs.
In a complaint filed before a special PMLA court in Srinagar on June 20, 2025, the ED named RGICL as accused No. 5.
“RGICL has entered into conspiracy with M/s TRBL, which resulted in their selection as the insurance company even without having the required eligibility,” the ED alleged, adding that the company approved inflated brokerage which was added to the premium, thereby causing loss to the government.
The agency further alleged that Rs 32.53 crore of the premium amount was “diverted to various accounts and utilised for business purposes and laundered”. RGICL has been found to have committed the offence of money laundering under the PMLA, the ED stated.
The government issued a show-cause notice to the company on May 29, 2025. While RGICL approached an arbitral tribunal seeking a stay, the tribunal directed that any adverse decision would not be given effect to for 15 days.
“The government is guided by the principle that public authorities are entitled to take administrative decisions to protect public interest,” the order said, adding that the pendency of arbitration does not bar the government from exercising its powers of debarment.
In compliance with the tribunal’s directions, the blacklisting will take effect after the expiry of 15 days, officials added. (KNS)
