IRDA has advised the Life Insurance Corporation of India (LIC) to ensure that investigations relating to all death claims are completed within the stipulated period of 6 months, so as to ensure prompt settlement of claims. It has also asked the LIC to put in place effective systems to settle the claims promptly.
While examining the documents submitted by LIC, the IRDA said that as on March 2010, there were about 300 cases where investigations were pending beyond 6 months.
IRDA said that there is still scope for LIC to improve the performance of its claim settlement and also adhere to the provisions of regulations, despite the huge number of death claims being handled by LIC.
The IRDA Regulations makes it compulsory for an insurance company to complete death claims investigations within 6 months from the date of lodging of claims. Further, the insurer has to pay or dispute the claim giving reasons for the same within 30 days of receipt of all documents.
Despite some insurers rejecting claims based on delay in claims filing, the IRDA, in September, has asked the insurance companies not to reject claims mechanically on technical grounds, like delay in filing claim documents as there were a lot of complaints from the insured that claims were being rejected on grounds of delay in intimation and submission of documents to the insurers.