Onus on insurers to share claims status

Insurers need to adopt a clear and transparent communication policy to protect the interest of policyholders: IRDAI

By A Staff Reporter in Calcutta
  • Published 11.04.19, 1:06 AM
  • Updated 11.04.19, 1:06 AM
  • a min read
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IRDAI said notifying the status would contribute towards a fair and transparent insurance claim settlement procedure (Shutterstock)

Insurance market regulator IRDAI has asked all insurance companies to streamline their claim settlement process and use mobile and e-mail services to inform policyholders the status of their claims at every stage of the settlement. The process shall start from June.

IRDAI in a circular issued on Wednesday has asked all insurance companies — life, general and health — to adopt a clear and transparent communication policy to protect the interests of policyholders. The regulator said there was a need to put in place a tracking mechanism to enable policyholders to know the status of their claim.

“In order to ensure a fair and transparent claim settlement procedure, all insurers shall notify about the status of the claim at various stages of its processing.

“In the case of health insurance, where third-party administrators (TPAs) are engaged for rendering claims services, it is the responsibility of insurers to ensure that the status of claim is notified to the claimant at every stage of the claim,” the Insurance Regulatory and Development Authority of India (Irdai) said.

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Insurance company executives said the details of policyholders such as email and mobile numbers are collected in most cases.

The circular is more relevant for third-party health administrators (TPAs) who settle the claim for health insurance covers as there is often a lag in informing policyholders about the status of the claim settlement.

“In the case of health insurance, where TPAs are engaged for rendering health services, insurers shall ensure that all related communications, such as the issuance of ID card, are sent either by the TPA or carried out by insurers on their own,” the circular said.

“At every stage of claim processing, such as calling for further requirements, or arranging for survey, communication of final decision, that is, admission or rejection or repudiation of claim, payment details such as by cheque or bank credit etc, timely notifications shall be sent to the policyholder or claimant,” said the circular.

The companies will also have to send brief messages to customers to enhance the awareness apart from sending necessary caution messages like not falling prey to spurious calls/offers.

The regulator, however, said that providing the mobile number and email id for policyholders shall be voluntary and not made mandatory.