Settle claims on time: IRDA

Insurance Regulatory and Development Authority (IRDA) Chairman C.S. Rao did some tough talking when he asked third party administrators (TPAs) to settle health insurance claims on time and said insurers should not ignore rural markets and the low-income segments of the population.

Speaking at the Sixth Global Conference of Actuaries, organised by the Actuarial Society of India and the Federation of Indian Chambers of Commerce and Industry, Rao said the regulator would take action against TPAs and insurance companies that did not settle claims on time.

"We will definitely tighten the rules. The onus for settling claims is on insurers. If it is not done by TPAs, it has to be settled by the insurers," he told reporters on the sidelines of the seminar. Rao added that IRDA was discussing with insurers and TPAs the growing incidents of default in settling health insurance claims.

He, however, added that insurers and TPAs were facing "initial hiccups" as the volume of business had grown more than they had expected. Many of them were increasing their investments to meet the growing demands, the Irda chief said.

IRDA was also in the process of building a health insurance database to assess the premium and settlement ratios and the exercise was expected to be completed in the next six months.

Referring to the private sector, Rao said insurance companies had largely ignored the rural and social sector. "I am disappointed that products meant for rural areas and to meet the special requirement of socially-disadvantaged sections have not come up in a significant way," he said.