Hyderabad: A 10 per cent rise in complaints in life insurance cases has been noted by the Insurance Regulatory and Development Authority of India as consumers are going to courts and approaching the insurance ombudsman to get their claims settled.
Complaints of life insurance claims being denied or delayed are the most common, apart from unfair business practices and alleged mis-selling by insurance companies. The rise in complaints is largely against unfair business practices where insurers are complaining of being cheated and their claims not being settled on time.
Till April 2016, 29,000 complaints were received, but the backlogs are yet to be cleared. The highest number of complaints was noted in 2011-12 when more than 1 lakh were filed for unfair practices.
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Mr Illesh Shah, a life insurance agent, said, “The IRDAI has asked all insurance companies to complete all claim-related investigations within six months and let the consumer know the status. But this is not happening. Many a time, life insurance claims are rejected due to wrong documentation, improper information and for not following the right process.” Only 5 per cent claimants approach the courts for settlement and 10 per cent approach the insurance ombudsman.
In the case of P. Ram Reddy, who had died in an accident after paying the first premium to a private insurance company, the delay in encashing the premium cheque led to the rejection of his wife’s claim on the ground that the premium was not paid. The company had given a receipt for the premium and the ombudsman ordered the company to pay the full insurance amount to his widow.
Advocate V. Satyanarayan of the State Consumer Forum said, “The first mistake done by consumers is in submission of documents, and that is taken very seriously by the insurance companies who are not willing to investigate and rectify it. Even for technical details, a lot of hue and cry is raised. These aspects require fine-tuning as the company always doubts the claimant despite submitting valid proof.”
Another problem is the delay in filing claim documents due to which policies often get rejected. While IRDAI has asked companies to not mechanically reject claims, total implementation has still not been done.
