General insurers cannot reject claims for want of documents, need to comply with strict timelines while settling claims and offer to motor insurance customers the additional ‘Pay as you drive/Pay as you go’ option as the first choice, according to insurance regulator IRDAI.
Counting these among the customer-centric measures of a comprehensive master circular on general insurance business it has issued by repealing as many as 13 circulars, the Insurance Regulatory and Development Authority of India said its emphasis is on reforms, facilitating seamless customer experience through simplification of the process while ensuring ease of operations for the insurers.
A key aspect of the exercise is the move towards easy-to-understand products with introduction of a customer information sheet that will provide all policy details, including scope of coverage, exclusions, warranties and claim settlement processes.
For insurers “the shift from rule based to principle-based regulatory framework” is aimed at facilitating ease of doing business, promoting innovation and enabling reduction in response time for emerging market needs, it said.
On measures aimed at simplifying the claim settlement process, IRDAI said insurers ought to call for the required documents at the time of underwriting the proposal and should reject no claim for want of documents. “The customer may be asked to submit only those documents necessary and related to claim settlement (if cashless is not available),” it said.
Favouring strict timelines for settlement of claims, including TATs for appointment of surveyors and submission of their reports, the regulator said it will be the duty of insurer to obtain timely survey reports. There also should be no burden on the customer for disposal of salvage. “Collection of salvage from the customer is insurer’s responsibility,” it said, pushing for the additional ‘Pay as you drive/Pay as you go’ option, in which the premium is linked to usage, as the first choice insurers should offer to motor insurance customers.
The regulator said retail customers of general insurers can cancel the policy anytime by informing the insurer, who in turn need to refund the proportionate premium for the unexpired policy period. Insurers can cancel the policy only on grounds of established fraud.
Insurers should consider suitability and affordability of customers in product
development and avoid unnecessary and superfluous coverages. While pricing products, they need to factor risk exposure, experience and expenses so that the premium rates are not excessive or inadequate or unfairly discriminatory, it said.
The master circular applies to all existing general insurance products and add-on cover. It will also apply to the general insurance coverage section within a package product, but not on health insurance products included within a packaged product. The master circular comes in the backdrop of de-notification of all the tariffs and policy wordings, IRDAI said.
