 "Air India crash, Ahmedabad crash")
To create a mechanism for quicker claim settlements regarding casualties on a big scale and develop a comprehensive standard operating procedure to deal with such incidents, the Union finance ministry may convene a meeting with insurers soon.
The move follows last week’s Air India plane crash, which has prompted the government to reassess existing protocols for insurance claim processing in such situations.
“We need to prepare our insurance industry for uncertain times, and hence we will tell the companies to draft a road map to handle such situations if it happens, as a cautionary measure,” said a senior government official.
An email query sent to the finance ministry remained unanswered till the time of going to press.
The official said the finance ministry had asked the Insurance Regulatory and Development Authority of India (Irdai) to tell insurance companies to expedite claim settlements related to the recent accident.
According to the official, there are two main categories of claimants: Individuals who held personal life insurance policies and those covered under group policies taken by the airline.
“The government has asked insurers to prioritise the victims of the Air India crash. We’ve asked them to prepare separate lists for both categories and set up a dedicated helpdesk to ensure faster redress,” the official added.
According to the source, since identification is going on, insurance companies are trying to reach the claimants and to settle their claims.
Earlier Business Standard reported, according to industry insiders the crash was expected to result in insurance claims between $130 million and $150 million. More than 50 per cent of these claims will likely be borne by global reinsurers because aviation policies are typically structured with primary insurers transferring a significant portion of the risk through reinsurance arrangements.
The claims will include three kinds of liabilities: The damage to the aircraft; the deaths of those on the aircraft, including the crew members; third-party liabilities because of the loss of lives where the aircraft crashed; and cargo liabilities.
Industry insiders are estimating $80 million-100 million in claims for the aircraft damage, following the crash, and over $50 million in claims for the loss of all lives.
Major life insurance companies, including Life Insurance Corporation of India (LIC), Bajaj Allianz Life Insurance, and HDFC Life, are expediting the claim settlements. LIC has announced concessions to mitigate the hardships of the claimants of LIC policies.
“In lieu of death certificates, any evidence in Government Records of death of the policyholder due to the plane crash or any compensation paid by Central/State Government/Airline Authorities will be accepted as proof of death,” LIC has said in a statement.
Similarly, Bajaj Allianz Life Insurance has established a dedicated special-claims settlement desk to prioritise the processing of death and disability claims for its customers affected due to the crash.
According to HDFC Life, a claim can be initiated by nominees/legal heirs of policyholders by providing the proof of death issued by the local government, police or hospitals.
