LIC has been reprimanded for delay in settlement of death and maturity claims. Of course, the delays are very few considering the number of claims settled by the state-owned insurer

The Insurance Regulatory and Development Authority (IRDA) conducted an inspection of records of Life Insurance Corporation of India (LIC) based on a complaint of partial claims settlement of a death claim. It found that LIC had taken more than six months to repudiate the group insurance death claims in respect of 24 cases and complete the investigations in respect of 263 individual claim claims during the year 2009-10. It was also noticed that 1,424 maturity claims were settled beyond six months during the same period.

LIC processes approximately 7,00,000 death claims and more than 175,00,000 maturity claims in a year. In the order, IRDA has taken a cognizance of the large volumes being handled and comparatively better track record of LIC in claim settlement, but adds that there is still scope for the insurer to improve the claim settlement performance and adhere to the provisions of the above referred regulations.

Only 32 early claim investigations were pending beyond six months in 2009-10. A senior LIC official told Moneylife, “In some early claims, the client may not cooperate in investigation, there can be delays from doctors/hospitals or police; some issues keep the case pending. In these rare situations of delay, LIC does pay interest for the delay. LIC has policyholders in deep rural area where getting documentation is not easy. There are cases where the widow has gone to her parents’ home and in-laws are not interested in widow getting the money and we don’t have contact information of her parents’ home.

The rules of the game are different totally different when compared to metros. There are also cases of fraudulent claims where the policyholder may not have even died and hence there is need for proper investigation.”

LIC has initiated measures in rural areas to educate the claimants for timely submission of documents while lodging the claim and claim investigation is one of the priorities of its personnel. LIC exercises abundant precaution to ensure that the claim amount goes only to genuine and legitimate claimants.
    
When asked about the payment delay for minuscule number of maturity claims, a senior LIC official said, “Considering over 175,00,000 maturity claims in a year, delay for a thousand claims are too low. In some cases, the policyholder has not paid all the premiums and we have not heard from him for 15-20 years. Lack of correct contact information can also lead to delay in payment.”

IRDA needs to probe blatant rejection of health insurance claims on technical reasons for delay in hospitalisation intimation and claims filing. It will be more meaningful and hapless mediclaim customers will stand benefit.

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