Money & Banking

Follow uniform method in publishing death claims paid, IRDAI tells life insurers

G NAGA SRIDHAR Hyderabad | Updated on January 10, 2018

Insurers are following different methods to arrive at death claims paid data, while publishing them in insurance advertisements: IRDAI

Life insures will now have to be transparent in projecting death claim settlements in advertisements.

In a circular, the Insurance Regulatory and Development Authority said: “It has been observed that insurers are following different methods to arrive at death claims paid data (death claims paid ratios), while publishing them in insurance advertisements.

“In order to have uniformity across the industry, the life insurers should use or publish only annual figures of death claims paid ratios, based on the number of policies alone.”

These figures should reflect the entire financial year and be based upon the latest IRDAI Annual Report or latest annual audited final figures submitted to the authority, the regulator said.

If an insurance advertisement contains death claims paid, then the data for individual and group polices shall not be clubbed together.

The advertisements for group products should reflect only group death claims paid, while individual products should reflect only individual death claims paid.

In case of advertisements promoting the company’s brand without reference to products, only individual death claims paid should be used.

Settlements made

According to IRDAI’s data, in 2015-16, life insurance companies had settled 8.54 lakh claims on individual policies with a total payout of ₹12,636.66 crore.

The number of claims repudiated or rejected was 15,157, amounting to ₹736.51 crore. The number of claims pending at the year-end was 6,031 and the amount involved was ₹444.23 crore. Of these, 1,189 claims were pending for less than and up to one year.

The claims settlement ratio of LIC was better than that of private life insurers. It had increased to 98.33 per cent during 2015-16 against 98.19 per cent in the previous year.

For private insurers, the settlement ratio had gone up to 91.48 per cent against 89.40 per cent in the previous year. The overall industry settlement ratio had increased marginally to 97.43 per cent from 96.97 per cent.

In the group life insurance, the total claims were 5,45,337, while 14,388 were pending.

Published on September 19, 2017

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