 "New insurance rules may not help private players")
Insurers are trying to settle death claims in less than half the stipulated time. They are also doing away with the need for documents, including death certificates,so as not to inconvenience claimants.
A life insurance company is required, to settle a death claim without investigation within 30 days. Those requiring investigation will have to be settled within six months.
Section 45 of the Insurance Laws (Amendment) Act, 2015, says no claim can be repudiated after three years of a policy being in force. These claims have to be paid, even if a fraud has been committed in making them.
Claims guarantees are being introduced by insurers, to make sure families receive some benefits if claims are delayed.
Amitabh Verma, chief operating officer, Tata AIA Life Insurance, said his company provided a guarantee for settling claims within eight working days of receiving all the documents for policies in force, for over three years.
“We also have a claims tracker on our website and send regular SMS alerts to keep claimants updated,” Verma added.
IDBI Federal Life Insurance also has an eight-day claim settlement guarantee. If the company fails to honour the guarantee it pays interest of eight per cent a year on claim amount for each day of delay. IDBI Federal said since the guarantee was introduced in July 2014, it had not paid any penal interest.
The Insurance Regulatory and Development Authority of India (Irdai) is ensuring claim settlement guarantees are part of insurance policies. Irdai has informed insurers they can promote these guarantees, if they are filed along with the product.
Having a bank partner makes settling claims easier, because processing can start from branches. Mohit Rochlani, director, operations and information technology, IndiaFirst Life Insurance, said the money was transferred directly to the claimant’s bank account.
“When we receive a claim, a common mail is floated to the claims heads of all life insurance companies asking whether any claim has been made to them,” he said. The fraud repository being set up by the Life Insurance Council would ensure genuine claims would be separated from the fraudulent ones, Rochlani added.
Similar processes are being followed for government insurance schemes. Rochlani said a portal was created by the Credit Information Bureau of India for the Pradhan Mantri Jeevan Jyoti Bima Yojana for use by banks to register claims at branches, and for insurers to update the claim status.
Fast-tracking of death claims is also being done. A Reliance Nippon Life Insurance spokesperson, said based on intensive analysis of historic trends, they have arrived at a pre-defined criteria to ensure fast-track processing of claims. This involves having an assured claim settlement within 12 days for claims meeting the service guarantee criteria, and promises to pay interest at 6.5 per cent per annum for the number of days exceeding the 12-day guarantee.
The key, according to insurers, was to keep the communication going with those insured at all points, so that relevant information was captured at regular intervals. Vijaya Nene, director, operations and services, PNB MetLife India, said claims could be intimated either at Punjab National Bank branches or at their branch offices. “We process claims at the earliest and ensure that we communicate with the claimants at every point via email and SMS,” she said.
“We have a committee to look into critical claims. The benefit of the doubt goes to the claimant to ensure genuine claims are passed,” Nene added. The Irdai annual report for 2014-15 stated insurance companies had settled 851,000 claims on individual policies with a total payout of Rs 11,788.67 crore in 2014-15. The number of claims repudiated or rejected was 18,231, for an amount of Rs 701.69 crore.
The sector’s settlement ratio increased slightly to 96.97 per cent in 2014-15 from 96.75 per cent in 2013-14 and the repudiation ratio remained static at 2.08 per cent.
