The Weekly Obiter


October 16, 2017

The Insurance Regulatory and Development Authority of India (IRDAI) has notified new rules to protect policyholder’s interest vide its notification dated June 22, 2017. The main objective of this notification was to ensure the interests of the insurance policyholders’ are protected, that insurers and distribution channels fulfil their obligations towards policyholder and to ensure policyholder-centric governance by insurers with emphasis on grievance redressal. Although the Regulation is focused on other minute and vital details to protect the interest of its policy holders the vital aspects that were added and formed the basis of this notification is as follows:
i) Enhancing insurance awareness and steps to be taken to prevent unfair business practices policies needs to be approved by the Board.
ii) Detailed information to be collected in matters pertaining to Life Insurance and Health Insur-ance Policies.
iii) If an insurer delays claims payments, it has to pay a penalty that’s 2% over the bank rate, which is specified by the Reserve Bank of India, as on 01 April of that fiscal year.
iv) In life insurance, after a claim is made, the insurer needs to ask for all the documentation within 15 days of the receipt of claim and take a decision on the claim and make the payment within 30 days. And, if a claim has to be investigated further then the insurer gets up to 90 days for investigating earlier it was 180 days from the date of receipt of claim intimation and the claim shall be settled within 30 days.
v) In health insurance, after a claim is made, the insurer shall settle the claim within 30 days from the date of receipt of last necessary document.
vi) Insurers will attract penalties for not adhering to these timelines.
vii) Proper rules and regulations to resolve complaints and grievances of the policy holders laid down by IRDA aiming for efficient and speedy settlement of claims.