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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.
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