Delay in intimation or submission of documents not a reason to reject claims

DEAR VIEWERS,

Life insurance and non-life insurance companies define specific timelines within which a policyholder must intimate the insurer in respect of any claims. On delay of claim intimation or submission of documents to the insurance company, the claims get rejected. This issue has come to the notice of the Insurance Regulatory and Development Authority (IRDA), who has issued the circular to insurance companies.

The new circular is applicable to all life insurance and non-life insurance companies and states although the current contractual obligation imposes conditions that any and all claims must be intimidated to the insurer within specified number of days for effective post claim activities like investigation, loss assessment etc; this condition should not prevent settlement of genuine claims, particularly when there is a delay in intimation or document submission due to unavoidable circumstances.

This notice has been issued in the wake of several complaints received by the IRDA wherein insurance companies have rejected claims of policyholders on grounds of delay in the prescribed process.

The regulator has advised insurance companies to take a decision based on sound logic and valid grounds. Rejecting claims purely on technical grounds and in a mechanical manner will result in loss of policyholders’ confidence in the insurance industry. This will also result in excessive court cases and tiresome proceedings.

Insurance companies must see the merits and good spirit of the clause without compromising on bad claims. All insurers have been asked to ascertain the complete reasons for the delay (in any) before ruling out the claims.

Further the regulator has ordered all insurance companies to make amendments in their policy documents to clarify this to the policyholders.

The new judgement will surely be a blessing to several policyholders who have genuinely been unable to notify their insurer or submit requisite documents in time. The regulator gives high priority to concerns and issues faced by policyholders.

 

.....EDITOR