Insurance Claims: LIC Tops in Individual Claims while Private Insurers Settled More Group
State-run Life Insurance Corporation of India (LIC) has once again, outnumbered private insurers in terms of the number of claims settled for individual customers.
However, in terms of group insurance claim settlement, LIC is found lagging behind private insurance companies, especially during the past two years.
While responding to a question in the Lok Sabha, Shiv Pratap Shukla, minister of state in the ministry of finance, said, “As per Regulation 14 of Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interest) Regulations, 2017, certain procedures such as immediate processing upon receiving a death claim, adhering to timelines for settlement of a death claim, reasons to be stated on rejection or repudiation of the claim, and interest to be paid due to delay on the part of insurer are required to be followed by insurers for claim settlement in respect of a life insurance policy. Regulation 17 of the said Regulations states that every insurer shall have in place proper procedures and effective mechanism to expeditiously resolve complaints and grievances of policyholders and claimants efficiently."
During FY17-18, LIC settled 725,000 insurance claims upon death of the insured, while all private insurance companies settled 104,000 claims. However, in terms of group insurance, these private insurers settled 477,000 claims while LIC settled 284,000 claims. Interestingly, till FY15-16, there was marginal difference between private insurers and LIC, in terms of settling group insurance claims. However, from next year onwards private companies have settled almost double claims each year compared with LIC. This also means that private insurers could be focussing more on groups insurance business than individual insurance policies.
Among private insurance companies, SBI Life Insurance Co Ltd (SBI Life) settled maximum number of individual claims at 18274, followed by Bajaj Allianz Life Insurance Co Ltd (13,176), HDFC Standard Life Insurance Co Ltd (12,289), ICICI Prudential Life Insurance Co Ltd (11,216) and Max Life Insurance Co Ltd at 10,125. However, absolute figures could be misleading.
According to the reply given in Lok Sabha, during FY2017-18, there were 519 complaints filed against private insurance companies compared with just 66 against LIC. IndiaFirst Life Insurance Co Ltd topped the list with 137 complaints among private insurers, followed by HDFC Standard Life Insurance Co Ltd (72), and Max Life Insurance Co Ltd at 63 complaints.
According to the minister, based on the analysis of claims data of life insurers, if any variation or abnormal discrepancies are noticed, they are taken up with the insurers. "These variations, deviations, discrepancies noticed are also thoroughly checked by the inspection department of Insurance Regulatory and Development Authority of India (IRDAI), during regular onsite inspection. The Authority also conducts focussed online inspection. In case any grave irregularity is noticed in the claim settlement by the insurer, regulatory and corrective measures are initiated accordingly," he said in a written reply.