CMA Shiba Prasad Padhi, AIIISLA, FIII, FCMA
Practicing Cost Accountant and Licensed SLA
 
Declaration:
The Article written is original and in individual capacity. Source of Data: IRDA Website
 
Accountants as Surveyors & Loss Assessors
 
Sec. 64UM of the Insurance Act, 1938 provides that for a loss, under a general insurance policy, beyond Rs.20,000/- a licensed Surveyor & Loss Assessor (SLA) is to be appointed who holds a valid license taken from IRDA. Engineers, Accountants (CMAs and CAs) and Associate/Fellow member of Insurance Institute of India are eligible to act as SLAs. SLAs are independent and licensed professionals who assess the loss and recommend for payment/non-payment to the Insurance Company (Underwriter). Usually SLAs get fees along with reimbursement of expenditure from the Underwriter as per Guideline of GIPSA.
 
One year training to be taken under guidance of another SLA and passing Surveyor examination is required before applying to IRDA for license and may be due to such training and examination system, we don’t find many Accountants acting as SLAs in our country. Those few Accountants who have a license and are active, get a good share of their income (which may range from few lakhs to few crores in a year) by conducting survey and loss assessment though it can hardly be a full time avocation by an Accountant in real sense unlike Engineers.
 
An Accountant engaged in practice and if decide to add SLA for Fire, Miscellaneous and Loss of Profit (LoP) claims as one of his practice area has to go through the following five broad stages:
 
A. Enrolment under an Associate/Fellow member of IIISLA
B. Training for 12 months
C. Passing the Examination
D. License for 3 years at a time subject to renewal after that
E. Empanelment with different GICs as SLAs
 
User Manual developed by IRDA for Training (72 pages, pdf file, www.irdabap.org) is a comprehensive document which clarifies all doubts through Flow Charts and clear description regarding how to enrol as a Trainee SLA and selecting a Trainer. The process is simple enough to understand for computer and internet literate Accountants.
 
Conducting survey and making loss assessment is a challenging job no doubt but the pre-requisites before undertaking any survey assignment is as under:
 
A. Thorough understanding of fundamental principles of insurance, Insurance Laws and Regulations
B. Policy Wordings that include policy conditions, exclusions and warranties
C. Loss assessment procedure
D. Understanding of standard documents like proposal form, claim form etc.
 
Eagerness to learn by a Trainee and ability/intent/exposure of the Trainer can actually bridge the gap as far as the above need is considered. As such a dummy trainee may be able to pass the examination by reading books, but he will fail miserably in execution of assignments without proper exposure and guidance. One mistake sometimes is enough to blacklist/de-panel an SLA by a Company apart from legal consequences for negligence/mistakes and action that can be taken by IRDA for professional negligence.
 
Accountants are better placed to deal survey assignments well as because they understand the business, accounting, taxation and legal compliance requirement of a business enterprise. Conducting survey with application of common sense, expert knowledge, understanding of insurance principles, policy coverage and assessing loss after consideration of the documents/books of accounts, each survey job is unique and can give self satisfaction to an Accountant, as he recommends payment to be made to an insured by an underwriter for a reported loss.
 
Responsibility in form of immediate and timely inspection/visits/investigation, due-diligence, follow-up for documents and writing/submitting the reports are major key result areas for an SLA.
 
Average fees for a survey job for a beginner could be around Rs.7,000/- and if an Accountant issue around 50 Survey Reports in a year, then his earning could be around Rs.3.50 lakhs which is nothing bad to start with. Survey fees are standardised and uniformly followed by Companies. Higher the amount of loss, higher the fees but losses of higher amounts are usually given to Senior Surveyors (A category or Fellow of IIISLA) may be having 15 to 20 years of experience whose average fees for a survey job could be around Rs.25,000/- or more.
 
The significant benefit of becoming an SLA is one can act as an empanelled SLA for as many companies as he wants and now even an insured can appoint a Surveyor for assessment of a loss. There is no retirement age and in due course of time one can create his own repute and image which helps in getting frequent, critical and high value loss assignment where fees could be substantial. Moreover, one can get satisfaction of recommending payment for losses, which is a onerous job for any professional.
 
A comparison of availability of individual licensed SLAs as per IRDA database dtd. 15.12.2012 and 03.02.2016 show the following figures: