Page 9 - The Insurance Times January 2022

Pensions, said at the summit that "even (IRDAI) said it has been observed that fecting states such as West Bengal,
with increasing penetration, etc. we the insurance intermediaries maintain Odisha, Maharashtra, Gujarat and
will need to factor for general and medi- multiple current accounts with banks other neighbouring states during June
cal inflation and given that medical in- at different operational levels (branch 2020.
flation operates significantly higher offices, and corporate offices, among While Telangana, Andhra Pradesh,
than CPI, there will need to be a cor- others), for regulatory and other pur- Karnataka and Maharashtra witnessed
rection cycle from a pricing stand- poses. floods in October last year.
point".
"...it is clarified that the respective in- Against a claim amount of Rs 2,559.10
Meanwhile, even as the insurance in- surance intermediaries including enti- crore due to these catastrophic events,
dustry favours another round of pre- ties sponsored by them may maintain the general insurers settled claims
mium increases, the regulator does not current accounts in appropriate num- worth Rs 760.68 crore (27,576 claims),
see merit in such an approach. Alamelu ber of banks for the purpose of meeting nearly 30 per cent the claims amount.
noted that IRDAI is keeping a close regulatory requirements, reinsurance
watch on how insurers handle the pre- business, etc that are in line with condi- Claims worth Rs 1,705.52 crore are out-
mium increase aspect. tions given in regulations, guidelines, standing against a total of 3,428 claims,
Alamelu also said that "InsurTechs and circulars issued by the Authority," IRDAI said in its annual report FY21.
FinTechs are both ways for the industry IRDAI said. Of the claims settled during the year, the
highest was towards cyclone Amphan at
to move forward" and that the "regu- The regulator had received represen-
lator has allowed the industry to do digi- tations from the intermediaries in re- Rs 470.94 crore (11,512 claims) affect-
ing West Bengal and Odisha, followed
tal policies and we have in the regula- gards to maintaining current accounts
tory sandbox encouraged this marriage with banks. by floods in Telangana (Rs 151.30 crore),
between the InsurTech and insurers." The ciruclar has been issued to avoid cyclone Nisarga in Gujarat and
Maharashtra (Rs 93.03 crore).
hardships, if any, faced by the insurance
Intermediaries can main- intermediaries. "In respect of the majority of the cases,
tain current accounts in IRDAI, however, asked the insurance claims are outstanding due to reinstate-
ment of property not having taken
appropriate number of intermediaries to review annually the place. There are also some instances of
need for having multiple current ac- the required documents not having
banks: IRDAI counts and rationalisation. been submitted by the insured due to
IRDAI said insurance intermediaries, lockdown. However, on-account pay-
including entities sponsored by them, General insurers settle ments have been made in several in-
can maintain current accounts in ap- only third of claim amount stances," IRDAI said.
propriate number of banks for the pur- In 2021, cyclones Tauktae and Yaas
pose of meeting regulatory require- due to natural calamities caused losses to property in some parts
ments and reinsurance business. during FY21 of the country.
In August 2020, the Reserve Bank of General insurers settled only a third of IRDAI said that during the current fi-
India (RBI) had instructed banks not to the total claim amount due to natural nancial year 2021-22 also, it has issued
open current accounts for customers calamities during the financial year guidance to insurers to attend to the
who have availed credit facilities in the ended March 2021, amounting to nearly claims arising out of such events
form of cash credit or overdraft from Rs 761 crore, according to data from promptly.
the banking system. IRDAI. As on June 30, 2021, claims amounting
Later, on a review, the RBI permitted Catastrophic events due to cyclones and to Rs 1,351 crore were reported by
banks to open specific accounts that are floods in 2020-21 led to the reporting 18,194 claimants due to cyclones
stipulated under various statutes and of as many as 34,304 claims worth Rs Tauktae and Yaas. Out of this, claims
instructions of other regulators/ regu- 2,559.10 crore, according to the 2020- amounting to Rs 38.40 crore were
latory departments, without any re- 21 annual report of the Insurance Regu- settled to 6,671 claimants, it said.
strictions placed in terms of its August latory and Development Authority of The disposal of pending claims at
2020 circular. India (IRDAI). various stages is being monitored by
In a circular, the Insurance Regulatory The fiscal gone by witnessed cyclones the Authority regularly, it said in the
and Development Authority of India such as Amphan, Nisarga and Nivar af- report. T
The Insurance Times, January 2022 9