Life insurers to also settle claims through ECS

To make claim settlement faster, cheaper and safer for policyholders, the Insurance Regulatory and Development Authority (Irda) has allowed life insurance companies to pay these through electronic methods.

“Recognising the increasing utility of electronic payments, which also ensure safety and speed of such payments, it has been decided to permit payments to all policyholders and beneficiaries through electronic payment methods such as electronic clearing system (ECS), national electronic fund transfer (NEFT) Systems, as approved by the Reserve Bank of India, in addition to account payee cheques,” said Irda in a circular.

Earlier Irda had asked insurers to settle the claims through account payee cheques only, after verifying the beneficiary. “We already use ECS and NEFT for premium collection. Customers are well versed with electronic modes of payment. This will make the claim settlement smoother and faster for the insurance companies,” said V Srinivasan, chief financial officer, Bharti AXA Life Insurance.