The Insurance Regulatory and Development Authority of India (IRDAI) has directed all insurers to notify policyholders status of their claims at various stages of processing.

IRDAI said notifying the status would contribute towards a fair and transparent claim settlement procedure.

In case of health insurance, where TPAs (third party administrators) are engaged to provide claims’ services, it would be the responsibility of the insurance company to ensure status of the claim is notified at every stage. Setting July 1 as the deadline by which such a mechanism should be in place, an IRDAI circular said “clear and transparent communications play a vital role in servicing of insurance policies. When it comes to claims, there is a need to make available a tracking mechanism for policyholders to enable them know the status of their claims.”

Unique number

Listing out what insurers need to do, IRDAI said on intimation of the claim, an unique claims’ reference number has to be created and notified electronically to the registered mobile number/e-mail id of the policyholder/claimant. Thereafter, at every stage of the claim processing such as calling for further requirements or arranging for survey, communication of the final decision — admission or rejection or repudiation of the claim — and payment details such as by way of cheque or bank transfer, timely notifications should be sent.

The policyholder or claimant should be able to track the claims status themselves on the website or apps of the insurers.

Directing the companies to put in place procedures for collecting mobile numbers and the e-mail ids of the policyholders at the point of sale and also on an ongoing basis, the IRDAI said sharing of the details, however, would be at the discretion of the policyholder.

Care should be taken to use simple language that is easy to read and understand in these communications. Wherever feasible, the communications may be in regional language too.