Policyholders May Benefit From IRDA Draft Norms on Claims Settlement

The new draft norms by the Insurance Regulatory and Development Authority (IRDA) on health insurance sector may help policyholders expect clarity on critical issues like claim settlement and increase in renewal premiums.

There are many cases where the reimbursement of claim or claim disbursement was delayed by up to six months. The series of recent orders by the Bombay High Court against the health insurers pertaining to claim settlement made the insurance regulator to frame new guidelines on matters concerning health insurance claims.

The draft guidelines would ensure that policyholders do not have to wait beyond 30 days for the claim settlement. IRDA says that the insurer shall offer a claim settlement to the insured within a period of 30 days as soon as receiving receipts of complete documents. Also, if the insurer decides to reject a claim for any reasons while recording in writing and communicating to the insured, it shall do so within a period of 30 days. Also, insurer has to give specific reason for rejecting a claim in writing.