Insurance Claim: Insurance companies should stop giving misleading advertisements on claim settlement, there is a big difference between claims and reality..

The Insurance Regulatory and Development Authority of India (IRDAI) has asked general and health insurance companies to stop displaying misleading claim settlement figures in their advertisements. They also need to jointly develop a standard formula for all companies to follow. Insurance regulator IRDAI has stated that the media is flooded with advertisements that are "misleading, deceptive, and against regulations." The claim settlement ratio is being presented as if claims are rarely rejected, while the actual data submitted to the regulator reveals otherwise.

IRDAI states that insurance companies use different definitions to calculate settlement ratios. They deliberately omit rejected or pending claims in their advertisements. These figures often do not match the figures provided in their audited annual reports.

What instructions were given to companies?
The insurance regulator has asked companies to review their current practices. Identify your shortcomings and establish a common formula that can be applied to all types of insurance, such as motor, health, personal accident, fire, and marine. The regulator wants a uniform standard for the entire industry.

Insurance companies explain the reasons for rejections
Insurance companies say that some claims are rejected because the deadline for submitting documents has passed. Other claims are rejected due to reasonable contractual terms.

Customers should also pay attention.
The regulator says that customers should not only look at the settlement ratio but also at the delay in claims, the reasons for claim rejection, and the overall quality of claims service. Once uniform rules are established, these factors will be examined separately.

What do the data say?
Insurance companies settled 83% of claims in 2023-24
Companies rejected 11% of claims
6% of claims were pending settlement as of March 31, 2024
Insurance companies settled health insurance claims worth ₹2.69 crore
Total amount paid to settle claims: ₹83,493 crore

Loss of ₹10,000 crore annually
The insurance sector is suffering losses of ₹10,000 crore annually due to irregularities. A report states that insurance companies, the government, and regulators must work together to save this trust.

Disclaimer: This content has been sourced and edited from Navbharat Times. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.