Irdai halves time to settle death claims by insurers
Mumbai, Sep 6, 2024
Insurance Regulator and Development Authority of India (Irdai) has tightened timelines for various services undertaken by insurance companies, aiming to enhance accountability and customer service.
In life insurance, death claims that do not require investigation must be settled within 15 days, down from 30 days earlier. For early death claims that require a probe, the resolution period is now 45 days while earlier it was "not later than 90 days".
Maturity claims, survival benefits, and annuity payments should be settled on their due dates, and policy surrenders or partial withdrawals must be processed within seven days, Irdai said in its master circular on protection of policyholders' interests.
‘Insurers must allow 30-day free-look for life, health plans’
Insurance companies are also expected to send premium due intimations and information regarding policy payments, such as maturity or survival benefits, at least one month before the due date. The regulator has said that if the companies fail to meet the timelines, customers can approach the ombudsman who has the power to direct insurance companies.
For new business proposals, insurance companies are required to process them and request any additional information within seven days. A copy of the policy, along with the proposal form, must be provided to the policyholder within 15 days.
In case of health insurance, the regulator has reiterated that cashless claims must be settled within three hours and non-cashless claims within 15 days. New business proposals should be processed within seven days and policy documents issued in a fortnight. For customers exercising their right to free-look cancellation, insurance companies are required to process the refund within seven days of receiving the request. Services related to policy loans and alterations in original policy conditions are also bound by a seven-day timeline.
In unit-linked insurance policies (ULIPs), services such as switch and top-up requests must be fulfilled within seven days. In cases of customer complaints, the insurer must acknowledge the complaint immediately and initiate action within 14 days. If the issue is not resolved within this period, the insurer must inform the complainant within 14 days of the original complaint date.
Key features of the master circular include providing essential information at various stages of the insurance contract and mandating Customer Information Sheets (CIS) with policy details. Additionally, insurers must offer proposal forms and CIS in regional languages and allow a 30-day free-look period for life and health insurance policies.
[The Times of India]
