Specify reasons to policyholders when rejecting insurance claims: Irdai

 

Insurers will also have to provide the grievance redressal procedures and the Insurance Ombudsman office addresses details to the policyholder, Irdai said in a cicular.

• The insurance regulator clarified in a circular that insurers cannot simply reject insurance claims based on presumptions and conjectures
• Insurers will have to provide granular details of the payments made, amounts disallowed and the reasons for the amount disallowed

MUMBAI: The Insurance Regulatory and Development Authority of India (Irdai) has directed insurers to ensure transparency towards policyholders while rejecting insurance claims.

The regulator further clarified that insurers cannot simply reject insurance claims based on presumptions and conjectures and have to specifically state the reasons for the denial or rejection, while necessarily referring to the corresponding insurance policy conditions.

The Irdai issued a circular on 19 March that said, "It is essential that all insurers establish procedures to let policyholders get clear and transparent communication at various stages of claim processing."

Insurers will have to ensure that the policyholder is provided with granular details of the payments made, amounts disallowed and the reasons for the amount disallowed. Moreover, the insurers will also have to provide the grievance redressal procedures and the Insurance Ombudsman office addresses details to the policyholder.

Besides having transparency, the regulator also told insurers to process the claims seamlessly and in an efficient manner within the prescribed timelines.

"All the insurers shall ensure putting in place systems to enable policyholders to track the status of cashless requests/claims filed with the Insurer/TPA through the Website/Portal/App or any other authorized electronic means on an ongoing basis. The status shall cover from the time of receipt of a request to the time of disposal of the claim along with the decision thereon," said Irdai.

Where claims are processed through Third Party Administrators (TPAs), the insurers are permitted to let their respective TPAs operationalize the claim tracking mechanism. The policyholders will have to be invariably notified in all the communications, the location to track the claim status, as per the Irdai circular.

Apart from this, the regulator has also urged insurers to help their policyholders in getting Covid-19 vaccination at a government facility or private facilities. They have been asked to help their policyholders’ book online appointment and once the first shot is taken, remind them of the second dose as the date approaches near. Besides, the regulator has also asked insurers to make similar arrangements for all their employees and agents so that they can be made immune to future Covid-19 infection.