Insurance regulator IRDA on Wednesday imposed a penalty of Rs 5 lakh on HDFC Standard Life for delaying settlement of claim and has asked the insurer to streamline its processes.
"Considering the nature of the violation, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs 5 lakh on HDFC Standard Life Insurance," the IRDA said in its order.
It has also directed the private life insurer "to put in place (within 15 days) effective claim settlement procedures and take all such measures that deem fit for both pro-active and timely settlement of all types of claims."
The order was issued on a complaint filed with Insurance Regulatory and Development Authority (IRDA) in April 2009 for delay in settlement of death claims by HDFC Standard Life.
Upon investigation the insurance regulator found that HDFC Standard Life did not have the effective mechanism to comply with the IRDA regulation for settlement of claims.
"On examining the documents and submissions of the Life Insurer it is observed that the Insurer did not have in place effective procedures to comply with the above regulation," IRDA observed.