When Nikita lost her husband to death, it was not only the grief of the unexpected mishap that shook her, but the huge debt trap of their home loan as well. Being a conventional house wife, Nikita has very little idea about Amit’s investments. This can be a common situation with not just conventional families, but for anyone. Amit has taken life insurance policies to safeguard the future of his family, but without knowing his policy no, his family is unable to raise the claim.
There are other instances of unpaid claim amounts with the insurance companies. Insurance companies usually issue the payment for claims, maturity benefits as well as money backs as cheques, and send them through post or courier. And many such payments are returning to companies by the courier agency / post due to non-availability of the insured / nominee in the address given to the company. Many people happen to change their address as years pass. Some might fail to update the change with the insurance company, while with some others, the company might not update it in the records due to some reason. All the above mentioned cases increase the unpaid / unclaimed money rate of the insurance companies and almost every insurance company has numerous cases of delayed payments. A new IRDA guideline has been issued to address this situation
Overview of the new IRDA guidelines:
In a move to counter unnecessary delays for claim settlements, the insurance sector watchdog, Insurance Regulatory and Development Authority (IRDA) has issued new guidelines whereby all insurance service providers will have to display details of any unclaimed amount above Rs 1000 on their website.
According to IRDA guidelines, all such information must be updated on a half-yearly basis before the deadline given- January 2015. The new policy also directs insurance companies to have a facility where the policyholder(s) or his/ her dependants can check if there is any unclaimed amount due to them is still with the insurer on its website.
What current existing policyholders must do?
As an insurance policyholder, one must keep your insurance service provider informed about any change of address and make sure the latest address is updated in the records of the company. Also check if your electronic bank details have been given to the company in case of a policy that offers refunds or repayments either periodically or after the end of the tenure of the policy.
If you are the nominee or dependent of a deceased person, an important thing you must do is to check if there is any outstanding amount due in your name / his name from any insurance companies. Since insurance companies have been recomposed to make a dedicated search section where old and existing customers can search any balance in their name using the name, pan card and/or policy number, the task will be easy for you when the new rule becomes live.
The use of electronic fund transfer:
The use of cheque system for repayment of funds can be a thing of the past as insurance companies are likely to use the National Electronic Fund Transfer (NEFT) for automatically transferring funds to the account of the policy holder or the nominee when the policy expires. Since majority of delays in the past has been due to clearance delays for cheque processing and clearing times, the use of electronic funds transfer is likely to decrease the defaults multifold. Even for payment of death claims, IRDA guidelines has ensured that insurance companies would now seek electronic fund details of the nominee in order to ensure fast settlement of death claims.
Proactive use of social media:
In the first of its kind guidelines using social media platforms in a proactive manner, insurance companies have been directed to get in touch with customers using various social media sites if the customer is not directly located or accessible. Customers who are not traceable on their address or phone number will now be contacted through the social media by insurance companies making it a consumer friendly policy.
Online display of information as a yardstick for insurance company selection:
New customers are more likely to check the unclaimed money reports listed on the insurance service provider website as a yardstick to choose the best insurance company. Needless to say, such a move is likely to impact insurance companies in a positive manner as they would compete with each other to avoid unnecessary delays. Since any unclaimed amount listed on the official website would act like a dark spot on the reputation of the insurance service provider, insurance companies would be proactive is settling all pending claims or delayed repayments.