The Insurance Regulatory and Development Authority (IRDA) has imposed a penalty of Rs 5 lakh on HDFC Standard Life Insurance Company for violating norms on claim settlements and has also asked the insurer to streamline its processes.
The order was issued on a complaint filed with Insurance Regulatory and Development Authority (IRDA) by Kunti Devi (read here) with IRDA on April 14, 2009 regarding non-receipt of death claims.
Upon investigation the insurance regulator found that HDFC Standard Life did not have the effective mechanism to comply with the IRDA regulation for settlement of claims.
It has also directed HDFC Standard Life to put in place effective claim settlement procedures and take all measures that is deemed fit for both pro-active and timely settlement of all types of claims within 15 days as the life insurer did not have such procedures, the order said.
As per provisions of Regulation (8) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 where warranted an insurance company shall initiate and complete such investigation at the earliest in any case not later than 6 months from the date of lodging the claim. The claim shall also be paid or be disputed, giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required.