Compensation by Insurance Companies

As per information furnished by Insurance Regulatory and Development Authority (IRDA), no reports that the insurance companies allegedly collect huge amount as premium from the subscribers and offer only a petty amount against compensation claims for losses on the pretext of various rules and regulations have been received. The life insurance companies settle the death claims in accordance with the provisions of the Insurance Act, 1938 in general and in particular within the norms laid down in Section 45 of Insurance Act 1938. The claim settlement in non-life insurance companies is based on sum insured, terms and conditions of the policy and principle of indemnity as well as the provisions of the Insurance Act, 1938 and IRDA Act, 1999.

The Insurance Regulatory and Development Authority (IRDA) has in place a system of information/data collection on the matter of claim settlements from all insurance companies. The information furnished by the insurers pertaining to the number of claims repudiated, claims outstanding are being regularly monitored. The Authority also has in place the procedures for carrying out onsite inspections periodically for examining the claim settlement procedures of all the insurers. If any deviations are noticed, the Authority initiates appropriate regulatory action.

This information was given by the Minister of State for Finance, Smt. Nirmala Sitharaman in written reply to a question in Lok Sabha today.