IRDAI Directs Insurers Not to Delay Claim Payments

IRDAI Directs Insurers Not to Delay Claim Payments

Irdai has asked life insurers not to withhold or delay settlement of claims of policyholders if there is any objection from claimants to fill the discharge voucher.

Discharge voucher is required to be furnished by claimants before raising a claim.

It is a standard practice by life insurers to inform about maturity date and amount of a claim to policyholders through a blank discharge voucher about 2-3 months in advance.

Policyholders have to furnish the information in discharge voucher and submit it back to the insurance company to raise a claim.

“Where the policyholder/claimant expresses unwillingness or reluctance or objection for any reason to execute the advance discharge voucher or to accept the amount, the Life Insurer should not insist on the discharge voucher or make it conditional for releasing the policy payment”, Irdai said in a circular issued today.

In such an event the life insurer shall not withhold or delay the payment for this reason but make the policy payment to discharge its contractual obligations, it said further, adding the life insurer may preserve the proof of making the payment.

The discharge voucher sent to policyholder/claimant should necessarily contain policy number and the nature of payment and amount of claim under different heads including deductions, if any, and other relevant details, Irdai said.

Insurance Regulatory and Development Authority (Irdai) said the provision was being made to protect the interests of policyholders as well as keeping in view the legal principles.

Contractual obligations are discharged by life insurers when making policy payments in cases of maturity or death claims or surrender of policy.

Source: Economic Times