1 june 2001

insurers may have to shell out penalty for late claim settlement
new delhi--according to the draft guidelines on "protection of policyholders’ interests" prepared by the insurance regulatory and development authority (irda), insurers should pay a penalty of ten percent simple interest if a claim is not paid within seven days submission of surveyor’s report.

in the case of life insurance companies, a 10 per cent simple interest is to be paid if claims are not cleared within 30 days of submission of requisite documents and claim papers. at present, there is no penalty on late claim settlements.

though the draft guidelines are silent on the proposed policyholder protection fund, top sources said that the issue has been discussed with insurance companies but a consensus is yet to be reached.