Page 23 - Insurance Times June 2023

policy wordings technically allowed the coverage.On enquiry surveyors' code of conduct gives all the timelines. They also
about the refusal, the claims department asked the claimant highlight all the rational and empathetic actions to be taken
to contact the underwriting department- which maintained to help a claimant, but these are rarely followed.
that the claim was very much tenable, but the underwriting
office told me that the claim was an issue to be handled by There is a provision in the IRDAI Protection of Policyholders'
the claims hub. The salesperson told me it was between the Regulation 2017 that the insurers are liable to pay interest
underwriting and the claims department. He was not for delay beyond the stipulated period stated in the
involved. regulation.

Finally, we asked them who was the actual Insurer. There It highlights that after the receipt of the final survey report
seemed to be no unified insurer; these were only or the additional survey report and on receipt of all required
uncoordinated departments. The regional chief could not information/documents that are relevant and necessary for
respond. The head office, if approached, would say, "The the claim, an insurer shall, within 30 days, offer a settlement
amount is within the regional office limit". Thus, the insuring of the claim to the insured / claimant (Sec15, subsection 8).
company has no responsibility as a singular entity.
Subsection 10 states that in case of non-settlement of the
The public perception of private sector insurers is claim within the above stipulated 30 days, the Insurer is
fragmented. There are exceptions among the employees liable to pay interest at a rate of 2% above the bank rate
who keep the lamp burning with generous funding from the from the receipt of the last relevant and necessary
union government. Otherwise, three of the four public sector document till the date of actual payment. The question is
insurers with a total loss figure of Rs.6 926/- crores in 2021- how many times such provisions have been adhered to.
22 would have shut shops by now. The losses incurred were
Rs. 1,675 crore, Rs. 3,115 crore and Rs. 2136 crore for Some companies came up with the concept of a claim service
National Insurance, Oriental Insurance and United India guarantee. Service assurance clauses/delay covers are
Insurance, respectively. incorporated purely as a marketing gimmick. They do not
The metro city entrepreneurs have accepted them as guarantee settlement of the claim. One can go on and on
reliable insurers with contemporary practices and asking for documents. A nominal penal amount for the delay
futuristic outlooks. is not a deterrent. The assurance is of a prompt reply, even
if it is a rejection.
The well-off business people of tier 2 and tier 3 cities
consider them suitable for motor insurance coverage
With the above backdrop, the time has come to propagate
and cashless settlements.
the insurance of claim concept. It is proposed that except
The industrialists of these cities still consider public
for fraud, all claims must be paid on the following two
sector insurers more reliable regarding financial
conditions being met:
strength. According to them, on claims their general
Policy validity
philosophy is "better late than never". They believe the
Proper coverage
public sector will eventually pay out because they are
unafraid of loss (read bothered).
In other words, the Insurer will be duty-bound to ensure
The old agents and mid-level semi-urban brokers
that the surveyors collect the documents and they guide the
advocate the prophetic words, "Sir, the public sector
claimant on how to prepare/ organize such documents. In
insurers consider a claim as a file to be cleared, whereas
case of insufficiency of any document, the surveyor has to
the young private sector considers claims as a cost to
clarify/approximate the quantification note.
be avoided". The public mostly agrees. I reserve my
comments.
Each claim will have a supervising manager's name attached
to it. Any delay in the settlement of a genuine claim as
At this juncture, the regulatory provision on claim disposal
stated beyond 60 days of submission of these documents will
and surveyors' code requires a discussion. The IRDAI
attract a monetary penalty on the approving authority,
protection of policyholders' interest regulations and
even with document insufficiency.
The Insurance Times June 2023 21