January 26, 2015
India’s insurance regulator is looking to make it mandatory for companies to settle life insurance claims within 60 days, in a move that will provide relief to millions of claimants..
Under this proposed rule, if a claim is not settled within 60 days, the beneficiary can take the insurer to court. Currently, the rules mandate that all claims have to be settled within six months, and most insurers stick to this limit but there have been several cases where it has been breached, reported Hindustan Times. The Insurance Regulatory and Development Authority of India (IRDAI) has issued a draft circular to life insurers seeking their response to the proposal to reduce the claim investigation time. .
Insurance companies are, however, wary of the move. “In case there is an increase in claims which are not genuine and companies have no time to investigate them thoroughly, it would in the long run impact the industry,” said a senior executive at a private insurance company on condition of anonymity. Life insurance firms said most claims are resolved within a couple of weeks but about 15% of cases come under scrutiny due to lack of required documents or disputes. .
A“In some cases, which require investigation, it does take months to check the authenticity of the claim, as sourcing information from various agencies like hospitals and police authorities can take time and is beyond the control of life insurance companies,” Mr V Viswan and, senior director and chief operations officer, Max Life Insurance, told Hindustan Times.