SRINAGAR: The Finance Department of the Government of Jammu and Kashmir has ordered the blacklisting and debarment of M/s Reliance General Insurance Company Limited for a period of two years from participation in any government bidding or procurement process in the Union Territory.
According to Government Order No. 167–FD of 2026 dated April 27, 2026, the decision relates to the implementation of a Group Mediclaim Insurance Scheme for government employees and pensioners executed under a tripartite agreement signed on 15 October 2018 between the Government of Jammu Kashmir, M/s Trinity Reinsurance Brokers Limited, and M/s Reliance General Insurance Company Limited.
The order states that under the agreement, premium payments of Rs 61,43,78,800 for 3.50 lakh employees and Rs 66,95,326 for 1,506 pensioners were released to the insurer.
It notes that after implementation, concerns were raised regarding the finalisation of the contract. The agreement was terminated with effect from 31 December 2018 after issuance of prior notice.
Following an inquiry by the Anti-Corruption Bureau (ACB), it was found that claims amounting to Rs 17,25,36,983 were settled for 3,344 employees and pensioners, while Rs 44,85,37,143 was identified as unutilised premium, which was advised for recovery from the insurer.
The Finance Department had issued a recovery notice in November 2021. However, the insurer reportedly did not comply and instead raised a counter-claim of Rs 6,19,95,366 against the government.
The order also records alleged non-fulfilment of contractual obligations, including failure to issue insurance cards and enrolment kits, non-provision of empanelled hospital lists, absence of a web-based MIS platform, failure to establish district-level offices and call centres, and non-finalisation of performance and penalty frameworks.
It further references investigations by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED), along with related legal proceedings. The ED, in its submissions before a designated court, has alleged conspiracy in selection of the insurer, irregularities in brokerage and third-party arrangements, and diversion of funds, including allegations of money laundering under the Prevention of Money Laundering Act (PMLA), 2002.
A show-cause notice was issued by the Finance Department in May 2025, to which the company replied in June 2025, stating that the matter was under arbitration. The government noted that arbitration proceedings are ongoing but do not bar administrative action in matters of public procurement.
The order also refers to directions of an arbitral tribunal stating that any adverse action shall remain in abeyance for 15 days to enable legal remedies.
After examining the reply and record, the government concluded that the explanation was unsatisfactory and decided to proceed with debarment in the interest of public procurement integrity and public interest.
