Page 28 - Insurance Times January 2024

Problems of

Bancassurance

in India

Shashi Bhushan
Council Member
IIISLA, East Zone

"In many policies, the bank writes the address of residence mentioned in the Aadhar Card as value
at risk at the time of providing loan. When the claims are lodged, the insured mentions the address
of risk different than given in the policy. When the surveyor does not find the damaged property on
the address mentioned in the policy bond, he concludes the claim as no claim in the first instance."

1. It has been that large number of claims are repudiated covered are not mentioned in the proposal
because of discrepancy in physical address on value at form and at the time of claim, it gets rejected.
risk in claim form. In many policies, the bank writes the 1 (c) Many times insured is taking policy under Cash
address of residence mentioned in the Aadhar Card as Credit Loan(CC) of godown only, whereas the
value at risk at the time of providing loan. When the policy is being issued on address of the shop.
claims are lodged, the insured mentions the address of
1 (d) Many times insurance policy are based on stock
risk different than given in the policy. When the surveyor
value against which loan has been taken + 25%,
does not find the damaged property on the address
whereas actual cost of stock held by the
mentioned in the policy bond, he concludes the claim
insured is many times more. In large number
as no claim in the first instance. of claims, insured suffers huge under insurance
1 (a) The reason of above differences is because of and gets negligible value of the claim. This is
wrong filling of proposal form by the also happening because insureds are not being
outsourcing agent of the Bank. The agents consulted at the time of deciding the Sum
often visits casually, and completes the Insured and the policy is being issued based on
proposals without physical verification of the his loan value only.
risk as well as without consulting the insured. 2. The bank is not providing copy of Insurance Policy to
The Bank is also not obtaining consent or Insured and due to ignorance of the policy condition it
signature by the insured on proposal form. leads to delay in intimation and rejection of the claim also.
1 (b) Many times insured is having more than one 3. Hence in my opinion following steps should be taken
warehouse. The address of all warehouses urgently:-

The Insurance Times January 2024 25