(1) The insurance company shall, upon receiving information of the accident, either from claimant or through accident information report or otherwise, designate an officer to settle the claims relating to such accident.
(2) An officer designated by the insurance company for processing the settlement of claim of compensation may make an offer to the claimant for settlement before the Claims Tribunal giving such details, within thirty days and after following such procedure as may be prescribed by the Central Government.
(3) If, the claimant to whom the offer is made under sub-section (2), -
(a) accepts such offer, -
(i) the Claims Tribunal shall make a record of such settlement, and such claim shall be deemed to be settled by consent; and
(ii) the payment shall be made by the insurance company within a maximum period of thirty days from the date of receipt of such record of settlement;
(b) rejects such offer, a date of hearing shall be fixed by the Claims Tribunal to adjudicate such claim on merits.
Legal Commentary & Landmark Judgments: Section 149
Section 149 (as restructured by the 2019 Amendment) establishes a time-bound statutory procedure requiring insurance companies to investigate accident claims, make settlement offers, and deposit compensation.
Under sub-section (2), the insurer must make a formal settlement offer to the claimant within thirty days of receiving the report. If the claimant accepts the settlement offer under sub-section (3), the Claims Tribunal records the settlement and directs the insurer to deposit the money within thirty days. If the claimant rejects the offer, the Tribunal proceeds with adjudication under Section 168. Note that in pre-2019 statute versions, insurer defense grounds and duty to satisfy judgments were housed in Section 149, now transitioned to Section 150.
Section 149 aims to transform MACT practice from prolonged adversarial litigation into an administrative settlement process. Claimants receiving a reasonable Section 149 offer can obtain full compensation within months without paying advocacy commissions. If the offer is rejected, the proceedings seamlessly transition into a contested claim under Section 166.