The IRDA monthly journal focuses on customer grievances and the ways in which to deal with them. While a number of issues have been acknowledged, the way in which to deal with them may remain on paper, unless insurance companies follow guidelines—and if IRDA acts when insurers don’t

The Insurance Regulatory and Development Authority (IRDA) October journal has its focus on ‘Grievance Redressal’. While customer problems have been acknowledged, the ground reality suggests that solutions are yet to be implemented. The biggest proof of it is that a few days back, IRDA came up with a circular asking life and non-life companies not to reject claims on technical grounds of delay in filing (See: IRDA asks insurers not to reject health insurance on a routine basis, but don’t pin much hope on this directive ).

The primary target of this circular is mediclaim insurers—some of whom have stringent filing deadlines. This has led to a lot of complaints to IRDA from policyholders for genuine claims rejection.

The IRDA journal has an article, ‘Managing the Pain Points for the Customer’ by the general manager (GM) of United India Insurance. Here are some of the statements made by the GM—and the ground reality, which in a few cases, pertains to United India Insurance itself:

•  After repeated grievances are reported regarding the same matter, insurers need to examine the root causes that create frequent grievances and take action to remove such causes to prevent the flow of repeating grievances. Reality - The mechanical claims rejection due to stringent deadlines for hospitalisation intimation and claims filing has been going on for more than eight months. There have been repeated complaints about intimation done within 24 hours and still the claims are rejected. It would take 4-5 months for complaint escalation to work and get the claim reimbursed. In other cases, repeated complaints of genuine cases for delay in intimation were faced with claims rejection—and condone requests were rejected as well.  

•  Traditionally, insurers are blamed for not distinguishing between real and technical reasons for denying claims. This is where grievances have a real role for a merit-based relook. Technical reasons have validity when they touch the core areas of the claim, but in some cases they are invoked ignorantly or owing (to) poor interpretational capability.
  Reality—Third Party Administrators (TPAs) are mandated to strictly reject claims based on stringent deadlines. Even for genuine claims, condone orders from a higher authority from an insurance company is not working—in many cases.
   
•   Toll free call numbers, FAQs on websites, ‘dos and don’ts’ for the customer while the policy cover is running are some of the services that are given to ensure that customers can manage the tenure of the policy against any error or misunderstanding.
  Reality—Expecting the customer to contact the insurance company within 24 hours of hospitalisation without a 24x7 customer-care service is next to impossible. Again, TPAs are also not available round the clock.
   
• Anywhere, anytime service, past history of insurance coverage and claims, and benefit entitlements like no-claim bonus (NCB) or discounts, better hand holding during times of claims etc., are issues on which customers will seek instant services and relief.
  Reality—Getting NCB certification takes too many follow-ups. Moreover, even if the policy states that an NCB clause is available, the TPA will again contact the insurance company to check if the NCB is really valid—which only adds to the time taken for claims settlement.
   
• Customer complaints are common in the financial services area. Hence Regulators, Ombudsmen, Consumer Forums and the Judiciary are hard on insurers who fail to honour their commitments by using interpretations that are one-sided or rely on the fine print without the application of mind.
  Reality—This statement finally mirrors the actual situation that many customers face.
   
•  From the time of claim intimation to the final payment of the claim cheque, there are many processes and requirements on the part of the insurer, intermediary and the insured. Any slackness from any side is bad for the outcome, but the driver of the service is the insurer; and insurer pro-activeness is fundamental to this service—and insurer commitments are to be made transparent in this area.
  Reality–There are a number of examples of insurance companies who have ‘processes’ which don’t work—resulting in customer harassment.
   
•  Cashless treatment for Health is always desirable to customers. To compel the insured to make out-of-pocket payments when they are cash-strapped is always considered to be against fairness
  Reality - Cashless for group mediclaim is still working fine, but individual mediclaim policyholders are denied cashless facilities in the same hospitals. Why does this happen? The Preferred Provider Network (PPN) in Mumbai for an individual policyholder does not include many of the major hospitals where the customer would be comfortable to go for treatment.
   
•  A bad perception about a company's claim service attitude can irreparably damage a company’s brand equity and reputation. In claims, there are two types of urgencies—time and correctness of the settlement. Insurers are fixated about reducing the claims outgo and in the process, they let go (of) the time urgencies felt by the insured. Where customers understand that the final amount to be paid may take time, they would be highly relieved if an 'on account' payment can be released because it makes it clear that liability has been admitted.
  Reality—“Insurers are fixated about reducing the claims outgo” is true. Currently TPAs are clearing claim payment for even routine procedures like cataract after 3-4 months. Sometimes the cheques arrive just before expiration date—which indicates that they were withheld for some reason or in the expectation that the cheque would expire by the time customer deposits it. ‘On account’ payment is a dream on paper considering what actually happens in mediclaim.

•  Grievances can arise in all areas of insurance service, but some of them are routine and can be handled quickly by insurers if tight processes and timelines are maintained in service. However, in the area of claims, there are areas of dispute where insurers may have been unable to take the right decision in the first instance. However, when the insured come up with a grievance, the insurer must utilise more experienced people to examine the grievance and take a decision based on the new inputs given by the customer.
  Reality – Why does the condone process (for genuine reasons of delay) not work in many cases? Hopefully, the IRDA circular may nudge insurers to relook at their approach to claims settlement.