The Insurance Regulatory and Development Authority of India (IRDAI) has decided to speed up the claim settlement of non-life insurance segment as it has directed the concerned insurance companies to engage additional in-house surveyors. The regulatory body has also instructed the companies to trim down their reliance on external parties for damage assessment, which is a contributing factor in delaying claims’ settlement.
To help accelerate the appointment of external surveyors, IRDAI has asked the insurance companies to raise their limit from Rs. 20,000 to Rs. 50,000 for motor claims and Rs. 1 lakh for other claims. The move will come as a relief to non-life insurance claimants, who have to wait for a longer time in order to get their insurance proceeds. The authority's decision came on the heels of incidence of excess delays in settlement of claims on account of unavailability of surveyors. This in turn not only made the claim settlement low but also escalated costs for insurers.
Benefits both companies and claimants
Also, IRDAI has trimmed the licence period for surveyors to three years and mandated them to qualify the surveyor examination, which is carried out by the Insurance Institute of India. The licences will be issued for marine, fire, motor, cargo, farming and engineering.
As per the existing rules, Insurance Act requires claims above Rs. 20,000 in the non-life segment to be surveyed mandatorily by surveyors. The new draft proposal has not only raised the limit but has outlined the need for surveyors to submit their reports within a period of 30 days.
Once the report is submitted, the insurance companies will evaluate the surveyors’ reports against the claims submitted and then process the claims. The IRDAI has also mandated the insurance companies to settle the claims within 30 days of receipt of surveyors’ report, which otherwise will attract interest as per the interest rate of the savings bank account.