IRDA directs all insurers to ensure clear communication of information to policy holders; mandates setting up of mechanism for transparency in claim settlement procedure by July 1, 2019

The Insurance Regulatory and Development Authority of India (“IRDA”) has, in a circular dated April 10, 2019, directed all insurers to ensure that there is clear communication of information regarding various insurance policy services to the insurance policyholders / claimants. The circular also requires the insurers to put in place a mechanism allowing policy holders to track the status of their claims. The circular is effective from July 1, 2019.

 What you need to do as an insurer?

  • Send all communication relating to issuance and servicing of insurance policies such as proposal registration, information about policy issuance, acceptance /rejection of proposals, renewal/lapse intimations/premium reminders, etc. in the form of a letter, e-mail, SMS or any other electronic as the IRDA may approve.
  • Send brief messages for the purpose of protecting the interests of policy holders and enhancing insurance awareness in addition to sending necessary caution messages such as not falling prey to spurious calls/offers etc.
  • Notify the policy holder about the status of the claim at various stages of its processing to ensure fair and transparent claim settlement procedures as per the mechanism specified by the IRDA. (This is detailed below)
  • Use simple language that is easy to read and understand in all communications. Wherever feasible, in addition to English/Hindi, the communications may be in regional or local language of the place of residence of the policyholder / claimant.

Systems to be put in place for the purpose of allowing claimants to track their claims and to maintain transparency in claim settlement procedure:

  1. Immediately upon the intimation of the claim, a unique claims reference number must be created and notified electronically to the registered mobile number and/ or e-mail id of the policy holder / claimant.
  1. At every stage of the claim processing such as calling for further requirements, or arranging for survey, communication of the final decision i.e. admission or rejection or repudiation of claim, payment details such as by cheque or bank credit etc, timely notifications shall be sent to policy holder or claimant.
  1. The notification sent to the policyholder / claimant containing the unique claims reference number must enable tracking the claims status by the policyholders / claimants themselves through the portal or website or Apps of the insurance company or any authorised electronic means, made available.
  1. Procedure for collecting the mobile numbers and the e-mail ids of the policyholders both at the point of sale and also on an ongoing basis as part of policy servicing must be set up. Providing mobile number and e-mail ids by a policy holder shall be voluntary and shall not be made mandatory.
  1. Services to enable the policy holders to update their mobile numbers and e-mail ids, be it in web portal or APPs of the insurers. Insurers must ensure total confidentiality of policy holders information.
  1. Consent of the policy holders shall be specifically obtained for notifying the services rendered by the insurers and no other unsolicited information shall be sent to the policy holders.

Source: Insurance Regulatory and Development Authority of India

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