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HC brings about shift in accident compensation claim procedures

Sept 23, 2020

Tribunals told to treat police report as claim plea

The Madras High Court has ordered a major shift in procedures adopted to claim and pay motor accident compensation in the State. It has directed all tribunals to treat detailed accident reports uploaded by the police on the Criminal Tracking Network and Systems (CCTNS) portal as claim petitions without waiting for the victims to file such petitions.

Justice S.M. Subramaniam issued the directions to simplify procedures for obtaining compensation, avoid bogus claims and ensure speedy disposal of claims. The judge pointed out that Section 166(4) of the Motor Vehicles Act of 1988 empowers the tribunals to treat accident reports as an application for compensation but hardly any tribunal invokes the provision.

Now making it mandatory for all motor accident claims tribunals to download the First Information Reports and other documents from the CCTNS portal, the judge held that they should be numbered as claim petitions within 15 days and notices issued to victims, insurance companies and the transport corporations or private vehicle owners. The judge also said that every endeavour should be made to settle the compensation amount through pre-litigation proceedings after referring the issue to the Legal Services Authority. It was only if no settlement could be reached between the parties, they should be asked to undergo a full-fledged trial to determine the liability and the quantum of compensation, he added.

To assist the tribunal to undertake such an exercise, the judge asked the Director General of Police to ensure that FIRs were registered promptly in motor accident cases and uploaded along with documents on the CCTNS portal without any delay. Investigation should also be completed within 90 days in all accident cases.

The documents uploaded on the portal should have been verified with the insurance companies and other departments concerned and they must be authenticated with a watermark. Names, address, phone numbers, Aadhaar card numbers of the victims and their family members should also be uploaded on the portal and those details must be legible, he ordered.

The DGP was also directed to create a system for sending e-mail notifications to the jurisdictional tribunals immediately after the uploading of accident reports on the portal. An officer in the rank of Inspector General of Police must be deputed to supervise whether all police officials in the State were following the directions scrupulously and initiate action against erring officials.

Justice Subramaniam directed the DGP to impound vehicles that get involved in road accidents without having been insured. The Director of Medical and Rural Health Services was further ordered to maintain accident registers in all government hospitals across the State and upload those particulars on the government website within seven days of every accident.

The judge wanted the Transport Secretary, the DGP and the Director of Medical and Rural Health Services to report compliance of his orders by January 18, 2021.


Insurance: Data analytics can make insurance firms smarter

Sept 23, 2020

As the value chain continues to become more digitally connected, insurers have the prerogative of better understanding customer segments and partners, and adapt to consumer needs in near real-time. In the near term, most of the digital insurance consumers will likely be young, educated and with higher levels of income.

To meet customer needs, most insurers have already started to collect a wealth of data. However, they have been slow in monetising this asset. To understand and meet consumer needs, there is an immediate need to create new business lines or models to capture the value of data and analytics. As more and more insurance consumers shift online to interact, compare products and prices, and make purchases, the volume of available data is increasing exponentially.
Data-enabled processes

Over time, Big Data and refined models will work for allowing risk pricing at an increasingly granular level. There is nothing to deny the fact that the insurance industry is a major component of the economy. It enables individuals and companies to take more risk, which further empowers innovation and growth. And the fuel of the insurance is data. Technology revolutions of the last few decades and falling cost of technology create new opportunities for insurers to harness the data.

Data-enabled processes will minimise friction and streamline the customer insurance journey, from request for coverage to claim. Digitalisation will thus help improve the customer experience and also the efficacy of back office processes. The true opportunity, however, lies in leveraging the collected data to fundamentally change how a particular business operates and delivers value to its customers.

Engaging with customers
Most insurers are striving to fundamentally change their relationship with consumers through the use of real-time monitoring and visualisation. Consumers who agree to let insurance companies track their habits can learn more about themselves, while insurers can use the derived data to influence behaviour and reduce related risks. For instance, in the auto insurance industry, telematics is being used to monitor driving habits and behaviour of the consumers in real-time.

Apart from providing digital transformation, use of more data and better tools to collect and report on data means better compliance. And this is particularly because insurance companies are subjected to increasing regulatory mandates at various levels. As insurance companies consider new uses for the data they collect, they must also be aware of the mandates from multiple agencies. In all the cases, the ability to collect, report and use data makes regulatory reporting easier and more consistent.

Yet another important reason why insurance companies need to embrace data is for fraud detection. One of the biggest issues that insurance companies are facing right now is fraud. According to most insurers, 1-1.5 out of 10 claims is fraudulently filed. This is alarming, given the limited number of policyholders that an insurance company may have. While some policyholders do it sloppily, some do it meticulously and get away with it. With the use of Big Data analytics, a large amount of data can be checked in a short amount of time. It includes a variety of Big Data solutions, such as social network analysis and telemetric. This is the biggest weapon insurers have for detection of fraud while filing claims.


Irdai permits insurers to conduct video-based KYC

Sept 21, 2020

The objective of the VIBP, Insurance Regulatory and Development Authority of India (Irdai) said, is to leverage various electronic platforms to simplify know your customer (KYC) process and make it customer-friendly.

Insurers may undertake live VBIP by developing an application, which will facilitate the KYC process either online or face-to-face in-person verification through video, the regulator said. "This may be used for establishment/continuation/verification of an account based relationship or for any other services with an individual customer/beneficiary, as the case may be, after obtaining his/her informed consent...," Irdai said in a circular.

It further said all accounts opened or any service provided based on VBIP should be activated only after being subject to proper verification by the insurer to ensure that integrity of the process is maintained and is beyond doubt. Also to ensure security, robustness and end-to-end encryption, the insurers shall carry out software and security audit and validation of the VBIP application as per extant norms before rolling it out and thereafter from time to time.

Irdai also stressed that insurers should take the assistance of latest available technology - including Artificial Intelligence (AI) and face matching technologies - to strengthen and ensure the integrity of the process as well as the confidentiality of the information furnished by the customer/beneficiary. However, the responsibility of identification will rest with the insurer, it added.

The Reserve Bank of India has already amended the know your customer (KYC) norms, allowing banks and other lending institutions regulated by it to use video-based customer identification process.


Pollution certificate now mandatory to renew motor insurance: IRDAI

Aug 23, 2020

The Insurance Regulatory and Development Authority (IRDAI) has issued a new circular to insurance providers in India, asking them to obtain valid pollution under control (PUC) certificate for the vehicle while renewing the policy.

If the vehicle’s PUC certificate’s validity is expired during the time of the accident, the insurance companies will not cover any damages, the regulatory body said, adding that the pollution license is essential for all claims.

Earlier, the Supreme Court had directed Insurance Companies not to insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy. IRDAI has issued a circular to all general Insurance Companies to ensure that the direction of Supreme Court of India is followed scrupulously with a special focus on compliance in the Delhi – NCR.

In its circular addressed to all CEOs and CMDs of general insurance companies, the regulatory body noted, “Central pollution control board (CPCB) has raised concerns regarding status of compliance of above direction of Hon’ble Supreme Court of India in National Capital Region of Delhi (Delhi – NCR). Please ensure that the direction of the Supreme Court of India is followed scrupulously with special focus on compliance in National Capital Region of Delhi (Delhi – NCR).”

The PUC certificate is a document that any person driving a motor vehicle can be asked to produce by a police officer in uniform authorised by the state government. The pollution checking centres issue certificates if a vehicle is found complying with the prescribed emission norms.


India:General insurers turn to inhouse claims processing teams

Aug 14, 2020

With the rise in health insurance claims, accelerated by the COVID-19 pandemic, and more complaints over payment delays, general insurers have been pushed to set up internal teams to ensure quicker compensation.

An in-house processing team is able to clearly explain which expenses under health insurance are payable and which ones are not. This is because they are internal company experts. Sometimes an expense covered under a policy’s terms may be inadvertently excluded. In such instances, an in-house team would be able to resolve the discrepancy quickly, reported Moneycontrol.

In comparison, a third-party administrator (TPA) has to first check with the insurance company as to why a particular claim component has been excluded from the final settlement. Insurance regulator IRDAI has directed TPAs not to take health claims payment decisions on behalf of insurance companies. This means that a TPA will merely be involved with the processing of claims.

Last December, IRDAI allowed policyholders to choose a TPA for their health insurance policy. This can be done at the time of buying the policy or renewing it. If the policyholder does not choose a TPA of his choice, then the company will allot him a TPA of its choice. Also, if the insurer engages the services of only one TPA, the policyholder will have no option but to stick to that TPA.

Mr Bhaskar Nerurkar, head, Health Claims, Bajaj Allianz General Insurance, told Financial Express that a policyholder must look at parameters such as digital support offered by TPAs, turnaround time taken by the TPA and also the network providers to settle the claims. “The data on TPAs servicing will be transparently and readily available in future in the public domain so that a policyholder can make an informed choice,” he said.


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