Insurance companies will have to lay down a timeframe within which they would settle claims of the insured. This advice from the Finance Ministry comes in the backdrop of increased concerns over undue delays in claim settlements.

‘Not satisfactory'

“The track record of the insurance industry in India in settlement of claims so far has not been satisfactory. Undue delay in claim settlement, underpayment and hassles in prompt settlement are the main concerns of the insured. It is necessary that insurance companies lay down a timeframe within which claims would be settled and adhere to the schedule,” Mr Shashi Kant Sharma, Secretary, Department of Financial Services, said at an insurance event here on Monday.

In the last decade, the insurance industry in India has undergone a remarkable transformation on multiple fronts. There has been progress in terms of enhanced penetration, increased coverage of lives/property, growth in distribution channels and more products.

In the life insurance segment, there are now 22 companies besides Life Insurance Corporation (LIC).

The share of the private companies has increased from virtually zero in 2001 to 55 per cent of annualised new business premium (ANBP) in 2010, according to a recent Boston Consulting Group-FICCI report on Indian insurance industry.

However, post recent regulatory changes, which have positively impacted LIC, the share of private companies fell to 40 per cent for the first ten months of 2010-11.

The biggest loss in market share was for the top five private companies, with their share coming down to 24 per cent from about 36 per cent in FY 2010-11.

> krsrivats@thehindu.co.in

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