HDFC Life clarifies on Irda show-cause notice

HDFC Standard Life has justified that it had delayed its settlement due to non co-operation of the claimants. The Insurance Regulatory and Development Authority (Irda) had issued a show-cause notice, wherein, HDFC Life was penalised for Rs 5 lakh for delaying settlement of claim and has asked the insurer to streamline its processes.

HDFC Life in a response said that it had done so due to non-cooperation of the claimants, hospitals or other public authorities to provide the required information.

The fine was imposed based on an enquiry conducted by Irda with regard to a complaint filed by a policy holder on non-receipt of death claims in 2009.

"HDFC Life has a philosophy of paying all claims unless and until there is a non-disclosure of material fact or a fraud against the Company. HDFC Life has a practice of investigating such claims, which involve requirement of additional information. However, HDFC Life pays penal interest for compensating policy holders as specified in the regulations, wherever these delays take place,” HDFC Life said in its response.

Irda had also directed HDFC Life "to put in place (within 15 days) effective claim settlement procedures and take all such measures that deem fit for both pro-active and timely settlement of all types of claims."

Source: Business Standard