Besides benefiting policyholders, whose claims for settlement are rejected on technical grounds, the IRDA move will also help the industry curb unnecessary expenses on litigation and court settlement.
IRDA has issued a circular to this effect to life and general insurance companies as it has received many complaints on rejection of claims.
The IRDA circular said ,'' Policyholders should intimate and submit the required documents to their insurance company within the stipulated time so that the insurer can start post-claim activities such as investigation, loss assessment, provisioning and claim settlement. However, when there is delay in intimation or submission of documents due to unavoidable circumstances, the regulator has emphasised that this should not prevent settlement of genuine claims The policyholders would lose confidence in the insurance industry if their claims are rejected purely on technical grounds.."
The IRDA has asked the companies to incorporate additional clauses in policy documents to assure customers that their claims can be rejected only on the basis of sound logic and valid grounds.
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