Insurance Regulatory and Development Authority of India (IRDAI) has imposed penalty totalling Rs.20 lakh on Max Bupa Health Insurance Company Ltd. for four violations, one of which pertains to timelines for settling claims.
The order, dated April 26, by Member (Finance and Investments) V.R. Iyer followed an onsite inspection in December 2012, a show-cause notice in November last year and a personal hearing, attended by the firm’s senior executives, earlier this year.
As per the charge pertaining to the timelines, the average number of days the company took for registration of a claim was 64 days in 2011-12 and 62 days in 2012-13. With regard to settlement of a claim, it took on an average 70 days and 44 days respectively.
The order said that the insurer was not capturing the date of intimation of claims in the system. “There was lack of proper internal controls and procedures while settling the claims.
There was delay in settling the claims in majority of cases.” Stating that lack of proper internal controls was a violation, it imposed Rs.5 lakh penalty.
Two versions
Another penalty of Rs.5 lakh was imposed on the company for selling the new version of an insurance product before its clearance as well as offering the old version even after approval of the new version.
“The insurer cannot have two versions of a product in the market at the same time,” the order said.
The regulator said Max Bupa Health Insurance Company had procured insurance business through entities not licensed as per the Insurance Act.
This amounted to “serious violation” of a circular of the Authority, the order said imposing a penalty of Rs.5 lakh.
The fourth penalty for a similar amount related to the insurer engaging outsourced vendors for lead generation.
This violated the duties and obligations as per the IRDA (Sharing of database for distribution of Insurance Products) Regulations, 2010, the order said.
