The Jammu and Kashmir government on Friday issued an order formally cancelling the controversial tie-up with Anil Ambani’s Reliance General Insurance for a group mediclaim policy for its about 6 lakh employees and pensioners .

Governor Satya Pal Malik had said in October the tie-up would be cancelled. Formal orders to this effect were issued by Finance Secretary Navin K Choudhary on Friday.

The order said the tie-up would be cancelled with effect from the midnight of 31 December. Drawing and disbursing officers of all government departments and autonomous bodies have been ordered not to henceforth deduct premium of the policy from the salary of employees.

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Following complaints of irregularities in awarding the contract for the health insurance scheme, Governor Malik had in October announced that the scheme would be cancelled.

The scheme was rolled out in September as mandatory for the serving employees, employees of PSUs and Vaishnodevi Shrine Board. It was optional for pensioners and accredited mediapersons. Employee organisations had raised doubts about fairness of tying up with Anil Ambani’s Reliance right from the beginning after some patients’ claims were rejected by certain hospitals.

Referring to the scheme, Malik had said, “I studied it myself. The issue is that the government had not issued any tenders. A private company had asked for tenders on behalf of another company. Those bids were not displayed anywhere on our (government’s) website. The tenders were changed to suit a particular company.”

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“It was full of frauds. I discussed the issue with the chief secretary and made it clear that such things can’t happen in my presence. So we decided to cancel it,” he had said.

The policy had been tied with M/s Reliance General Health Insurance Company Ltd on annual premium of Rs 8,777 and Rs 22, 229 for employees and pensioners, respectively.