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Unclaimed Rs 15,000 crore lying idle with life insurance companies: IRDAI

July 30, 2018

NEW DELHI: The Insurance Regulatory and Development Authority of India (IRDA) has disclosed that about 23 insurance companies haven’t disbursed policyholder money worth nearly Rs 15,167 crores on account of not being claimed by them.

PSU insurance major Life Insurance Corporation (LIC) has Rs 10,509 crore out of the total unclaimed amount, as on March 31, 2018, while the 22 private sector insurers account for the remaining Rs 4,657.45 crore.

ICICI Prudential Life Insurance Co has been piling up Rs 807.4 crore of unclaimed insurance claims followed Reliance Nippon Life Insurance (Rs 696.12 crore), SBI Life Insurance Co (Rs 678.59 crore) and HDFC Standard Life Insurance Co (Rs 659.3 crore).

The responsibility of timely disbursal to policyholders or nominees had earlier been entrusted to policyholder protection committees of individual account holders by the IRDAI.

Apart from asking the policy providers to update information regarding unclaimed amounts on their websites on half-yearly basis, the regulator has also instructed them to provide a search facility on their website for policy holders or beneficiaries to identify any such unclaimed amount in the future.

Policyholders/beneficiaries are required to enter the details like policy number, PAN of the policyholder, name of the policyholder, date of birth or Aadhaar number, in a window provided on the website of the insurer to find out the unclaimed amount.

IRDAI has asked insurance companies to identify the policyholders, beneficiaries and nominees of the Rs 15,167 crore of unclaimed funds and payout all dues to them.

New Indian Express



Third-party insurance to be mandatory for new vehicles from 1 September 2018

July 29, 2018

A new Supreme Court ruling mandates that every new four-wheeler and two-wheeler sold in the country from 1 September 2018 should have a third-party insurance. The apex court has passed the ruling to ensure that the victims of road accidents receive compensation and also to encourage the insurance firms to look at it from a ‘human point of view’ and not from a commercial point.

The Supreme Court Committee on Road Safety observed that over one lakh people were dying in India every year in road accidents. In view of the situation, the committee headed by the former apex court judge Justice K S Radhakrishnan, it was recommended that at the time of sale of two or four wheelers, third party insurance should be made mandatory for a period of five and three years respectively instead of one year. The report further indicates that around 18 crore vehicles were plying on the roads of the country out of which only six crore have third party insurance, and victims of road accidents did not receive compensation as vehicles did not have a third party cover.

The Committee had held detailed discussions with the Insurance Regulatory and Development Authority (IRDA), General Insurance Council, Ministry of Road Transport and Highways and Department of Financial Services, Ministry of Finance and the government of India. Post discussions, the bench came to a conclusion that third party insurance should be made mandatory for four wheelers for a period of three years and for two wheelers, it should be done for a period of five years.

Source: www.carwale.com



Insurance company directed to pay ₹2 lakh to policyholder

July 28, 2018

For repudiating claim on grounds not included in the policy Dismissing an appeal moved by National Insurance Company, the State Consumer Disputes Redressal Commission here has directed the firm to pay over ₹2 lakh to the policyholder, for wrongly repudiating a claim.

Stating that “renewal of a policy” cannot be regarded as a “new policy”, the State consumer commission said that terms and conditions of the original policy has to be followed.

“The complainant had been taking the policy since 2000. Had it been a new policy document for the period in question as is alleged, it would not have given the previous policy number. On renewal, terms and conditions of old policy is revised. Since the policy was renewed, the exclusion clause relied upon by the insurance company is not applicable in the present case,” the district forum said.



Treatment for obesity

In the complaint, Delhi resident P.K. Suri had alleged that the National Insurance Company had repudiated a claim based on grounds that were not included in the policy.

“The claim was repudiated on the grounds that the treatment for obesity or condition arising therefrom and any other weight control programme was out of the purview of the policy in view of the exclusion clause. It was alleged that the clause was added in the policy without the knowledge of the complainant,” read the complaint.



Allegations denied

Denying allegations of deficiency in service, the insurance company, contended that the said clause excluded all expenses relating to treatment for obesity since 2007.

Meanwhile, upholding orders passed by a district consumer forum, the State commission held: “The policy for 2009-10 was a renewed policy, therefore it was to be governed by the terms and conditions of the policy issued to the complainant for the first time.”

Source: The Hindu



Irdai for minimising exclusions in health insurance policy

July 24, 2018

In a significant consumer-friendly move, insurance regulator Irdai today said it has started the exercise to minimise the number of illness/diseases which are not covered under the health insurance policies.

The Irdai had from time to time issued guidelines on standardisation in health insurance and to enhance transparency and uniformity. These include, standardisation of terminology to be used in health insurance policies and standard nomenclature and procedure for critical illnesses.

With the increase in the number of companies providing Health Insurance there is an increase in the number of products offered. It is desired that the industry adopts a uniform approach while incorporating the 'exclusions' as part of product design as well as for the wording of the 'exclusions'," it said in an order.

For the purpose, the regulator has set up a 10-member committee and asked it submit its report in eight weeks. The panel is headed by Suresh Mathur, Executive Director (Health), Insurance and Regulatory Development Authority of India (Irdai).

The panel will examine the exclusions that are prevalent in the health insurance policies with a view to minimise the number and enhance the scope of insurance coverage.

"Rationalise the exclusions that disallow coverage with respect to new modalities of treatments and technologically advanced medical treatments. Identify the type of exclusions which shall not be allowed," said the terms of reference (ToR) of the panel.

The committee will also study "wordings/language of the exclusions and standardise the wordings" in a simple and easily understandable language.

It has also been tasked to examine the scope for "allowing individual specific and/or ailment/disease specific permanent exclusions at the time of underwriting so that the policyholders are not denied health insurance claims unrelated to the exclusions".

Source: The Economic Times



6 facts to note before purchasing an insurance policy from a point of sale person

July 5, 2018

To facilitate growth in the non-life and health insurance business in the country, the Insurance Regulatory and Development Authority of India (IRDAI) introduced a new type of distribution model called point-of-sales person (PoSP), who are engaged either directly by insurers or by intermediaries such as corporate agents and insurance brokers. Let us understand the key differences of buying a policy from PoSP and insurance brokers in this story.



Type of insurance policies that PoSP and insurance brokers sell

TA Ramalingam, Chief Distribution Officer-Institutional Sales, Bajaj Allianz General Insurance, explained, “PoSP normally sell over-the-counter (OTC) products that are pre-underwritten and approved by IRDAI. These products don’t require any further discussion or explanation with the customer at the time of sale.”

Jyoti Punja, Chief Operating Officer & Customers Officer at Cigna TTK Health Insurance, added: “PoSP usually deals with products such as motor, travel and personal accident insurance as their benefits are simple to explain, stated upfront clearly and are fixed and pre-defined.”

In case of insurance brokers, Ramalingam said, “They deal with mega risk policies mainly from corporates.”



Whom do PoSP and insurance brokers cater to?

A PoSP caters to first-time customers looking for simple and basic insurance policies. Their focus is across geographies, which includes metro, urban, semi-urban and rural areas to serve customers.

Insurance brokers work with multiple clients and act as their financial consultant to determine the insurance company that the customer should opt for as per the risk involved. They focus is more in metros and urban areas to serve customers.

Eligibility criteria to become a PoSP versus insurance broker

PoSP are individuals for whom the eligibility criteria is simple, “A Class 10th pass with a valid Aadhaar card and 15 hours of training can apply. But a PoSP can only market insurance products,” said Anand Roy, Executive Director and Chief Marketing Officer at Star Health and Allied Insurance.

Whereas, a broker is a company which has to have a minimum paid-up capital of Rs 75 lakh, office infrastructure etc to be eligible for application. An insurance broker need to have a Bachelor’s degree and undergo 50 hours of training. Roy said, “Unlike POSP’s, brokers, apart from marketing insurance products of various companies, can offer claims consultancy, risk management services, et al.”



Drawback of purchasing a policy from a PoSP

A PoSP cannot explain complex insurance products. Pankaj Sharma, Business Head, Coverfox, said, “PoSP has to rely on an insurance broker/company for servicing demands of his customers. Since PoSPs are typically less trained, they need to take extra efforts to acquire experience of customer handling on a pre- and post-sale aspects.”



Benefits of purchasing a policy from PoSP

Punja said, “Allowing intermediaries to appoint PoSPs to sell retail insurance ensures greater adherence to norms as well as improves density by making policy purchases extremely convenient and easily available.” A PoSP of a broker drives more trust on account of being locally available for the customer. He can form a great interpersonal bond with customers since they have multiple common grounds of communication. Sharma added, “A PoSP of an online broker is also well trained and equipped with quick and efficient technology platforms to provide instant service to clients.”



Who settles claim and complaints after purchasing from PoSP?

The PoSP and broker (if involved) hand-hold the aggrieved customer throughout the claim settlement process. Sharma explained, “They act as the customer representatives with right knowledge and connections to get the claim processed without any hassle for the customer. Since the sale happens through the broker/insurance company appointing the PoSP, the ultimate responsibility of any mis-selling lies with the broker/insurance company. So, the entity who is appointing the PoSP is liable in case of a complaint.”

Source: MoneyControl.com



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