The IRDAI's new guidelines requiring insurers to communicate with a policyholder throughout the life cycle of the customer's insurance policy will result in many benefits in several areas ranging from the proposal stage to receiving a claim, according to Mr Abhishek Bondia, co-founder and principal officer at the insurance brokerage SecureNow. The new regulation takes effect in July.
Writing in Moneycontrol, Mr Bondia notes that under the new IRDAI circular, insurers are required to collect the phone number and e-mail address of the policyholder when the policy is bought and regularly update the same. Insurers have to offer a mechanism for policyholders to update their contact details electronically, both via the website and their mobile app. However, a quick glance of several insurers' websites will show that this facility has not been provided for.
If an insurer does not have the contact information of its clients, it will have to explain to the regulator that an earnest attempt has been made to collect it.
The new requirement will have an impact on various areas, says Mr Bondia. These are:
In some cases, a customer who applies for insurance cover does not know when he will hear back from the insurer and what’s going on with the application. Under the new regulation, insurers are required to regularly update the applicants about the processing status. This will bring transparency in cases where there is a medical underwriting or physical inspection involved, says Mr Bondia.
He says that the regulations should further specify the turnaround timelines for an insurer to review an application. In case a negative outcome is on the cards, it is better for an individual to know it sooner.
With insurers required to send periodic messages to customers, awareness can increase. Mr Bondia says, “We can expect that insurers will take this opportunity to inform policyholders about ways to utilise the policy.”
- Claim experience of policyholders
While there are currently prescribed timelines for claim processing, they are sometimes not met. Insurers can attribute any delay to the insured, citing incomplete documentation or claim complexity, says Mr Bondia.
The IRDAI has thus laid down specific guidelines about clear communication channels at the time of claim. As soon as the customer makes a claim, the company should create a unique claim reference number and forward the number to the claimant through an SMS or e-mail sent to the registered mobile number and/or the email address of the customer. After the claim is intimated, the insurer needs to keep the claimant informed about the claim status at every step of the settlement process till the claim is settled.