IRDA asks LIC to hasten claims settlement

The Insurance Regulatory and Development Authority has asked Life Insurance Corporation of India to complete all the claim investigations within the stipulated time.

In an order released on Tuesday after completion of investigation into a complaint by a policyholder, Mr J. Hari Narayan, Chairman, IRDA had also asked the public sector behemoth to put in place effective systems to settle the claims promptly.

In a inspection following the complaint, it was noticed that that LIC had taken more than six months to repudiate the group insurance death claims in respect of 24 cases and to complete the investigations in respect of 263 individual claims during 2009-10.

It was also noticed that a number of maturity claims were settled beyond six months.

The regulator observed that though the life insurer had a track record of settling substantial number of death claims annually, yet there were 300 cases as at March 31, 2010, where investigations were pending beyond six months.