Irda urged to get tough on erring firms

National Consumer Disputes Redressal Commission (NCDRC) chairman, Justice MB Shah, on Thursday urged the Insurance Regulatory and Development Authority (Irda) to get tough on insurance companies, which delay settlement of claims, for the benefit of policyholders.

"Taking advantage of technicalities, many insurance companies are delaying claim settlements and repudiating claims. Safeguarding the interests of the policyholders, and to minimise the number of litigations in consumer and other legal cells, Irda has to stringently implement its regulations against such companies," he said, adding, "all claims should be settled within six months."

Shah was delivering the keynote address at a seminar on 'Grievance Redressal: Insurance sector' organised by the Institute of Insurance and Risk Management (IIRM) here.

Criticising insurance companies' strategy of appointing surveyors and investigators, one after the other, in an effort to repudiate high-value claims in the case of fire accidents, Shah stressed the need for training the insurance agents.

"Training helps insurance agents educate the policyholders with regard to the terms and conditions of the policy including exclusion clauses, which were mostly printed in microscopic letters," he said, and urged the insurance companies to provide a transparent policy and a copy of the proposal within one month after a policy was taken.

Pointing out that in most cases, policyholders were kept in the dark on the terms and conditions of the policy by the insurance agents, who take their signatures on dotted lines, he suggested that the terms and conditions be printed in all the constitutionally-recognised regional languages to communicate with the policyholders.

Earlier, in his address, Irda chairman CS Rao said the terms and conditions of a policy should be fair between the insurer and insured.

"Conditions and warranties should be reasonable and capable of compliance. Exclusions should not be framed in such a manner that the value of insurance is lost. Similarly, policyholders should not be forced to buy covers that they do not need as a pre-condition for being granted a cover that they need. The procedures they need to comply with in the case of claims should be clearly spelt out, and be within the compliance capabilities of the customer," he said.

Stating that the complaints and grievances were expected to go up in view of larger varieties of products being brought out by insurers and in the non-life sector, especially owing to the removal of tariffs, Rao said, "It is incumbent on the insurers to work along with the regulator, to take initiatives to speed up redressal systems and review policy wording along with procedures and systems so that the root causes of disputes and complaints can be looked into and rectified."