Insurers Shall Ensure That Repudiation of Claims is Not Based on “Presumptions and Conjectures” – IRDAI
The Insurance Regulatory and Development Authority of India (“IRDAI”) vide its circular titled “Health Insurance Claims Settlement” and dated 19th March, 2021 issued directions to all insurers to be more transparent in their health insurance claim settlement process and appraise the policyholders of reasons in case of denial of claims filed.
The above-mentioned circular was issued as an extension to the circular dated 10.04.2019 wherein the authority kept the interests of policyholders in view and acknowledged the need to make available a tracking mechanism for policyholders so as to enable them to know the status of their claims.
Key takeaways:
- The circular was addressed to Life, General and Standalone Health Insurance Companies along with Third Party Administrators (“TPAs”).
- Two specialised PSU insurers- AIC and ECGC, that work in crop insurance and export credit insurance sector respectively stood exempted.
- Insurers were directed to establish procedures to let policyholders get clear and transparent communication at various stages of claim processing.
- Insurers were directed to put in place a system to enable policyholders track the status of cashless requests/claims filed with the insurer/TPA through the website/portal/app or any other authorised electronic means on an ongoing basis.
- The status shall cover from the time of receipt of a request to the time of disposal of the claim along with the decision thereon.
- Where claims are processed through TPAs on behalf of the insurers, policyholders should be notified about all the communications as well as location to track the claim status.
- In instances of denial/repudiation of claims, the communication thereof shall be made only by the Insurer by specifically stating the reasons for the denial/repudiation, while necessarily referring to the corresponding policy conditions.
- The insurer is required to furnish the grievance redressal procedures available with the Insurance Company and with the Insurance Ombudsman along with the detailed addresses of the respective offices.
- Insurer shall ensure that the policyholder is provided with granular details of the payments made, amounts disallowed and the reasons thereof.
