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Insurance cover against fraud

If you look up the Insurance Regulatory and Development Authority's (IRDA) website, you will find some heartening news: the regulator has started cracking the whip on insurance companies violating IRDA's regulation on protection of policy holders. Pushpa Girimaji reports.

delhi Updated: Feb 20, 2011 00:26 IST
Pushpa Girimaji

If you look up the Insurance Regulatory and Development Authority's (IRDA) website, you will find some heartening news: the regulator has started cracking the whip on insurance companies violating IRDA's regulation on protection of policy holders.

The IRDA (Protection of Policy Holders' Interests) Regulation 2002 mandates that a person buying or intending to buy an insurance policy be given all information pertaining to the policy in a simple, clear and explicit manner, so as to help her or him take an informed decision. It also stipulates that an insurer, insurance agent or any intermediary selling the policy act according to the code of conduct prescribed by the authority.

The regulation also specifies time limits for settlement of claims and payment of penal interest for delayed settlements.

The regulation mandates that 'every insurer shall have in place proper procedures and effective mechanism to address complaints and grievances of policyholders efficiently and with speed'.

The IRDA has also issued "Grievance Redressal Guidelines", classifying consumer complaints and specifying time limits for redress of each of those complaints. And it is now hauling up insurance companies for non-compliance of these guidelines.

On the left side on the IRDA home page (www.irda,gov.in), you will see an icon saying 'warnings and penalties'.

There you will find the list of life and non-life insurers who have been taken to task for breach of PPHI Regulation.

The violations include (a) non payment of penal interest for delayed settlement of claims, (b) delay in disposal of claims and (c) not keeping the insured informed of the action to be taken by him upon occurrence of a contingency likely to give rise to a claim under the policy.

So, if you are having any problems with your insurer, complain to IRDA. But make sure that you first complain to the insurance company and follow it up with IRDA only on failing to get a satisfactory response.

And while on the IRDA website, be sure to read up the PPHI Regulation and also the Grievance Redressal Guidelines. That will help you in dealing with your insurance company.

Narendra Doda: The insurance company representative from whom I bought a policy managed to win my trust to such an extent that I never ever suspected that the policy that I was issued was radically different from what was promised. I also found that the policy document showed several blood and urine test reports allegedly done on my blood sample and urine, which were never taken. On my representation, the company said nothing could be done as I had signed on the proposal form. I had signed the blank form- it was filled up by the company representative in my absence. This gentleman had also told me that he would provide me a gold coin worth about R4,000 and also that the company will give me a bonus of R1,500 within two weeks of receipt of policy. These were never given. 1) Can I get the representative punished for his deeds? 2) Can any action be taken against the company?

Answer: There are several very serious violations of the PPHI Regulation here, besides fraud and unfair trade practice, for which both the representative and the insurance company are liable. The insurer is doubly liable because even when you brought this to the company's notice, it failed to act. I am sure IRDA will take a very serious view of these. Please send a formal complaint immediately to IRDA with specific details.