The next time an insurance company forces you against your will to sign their discharge voucher (DV), which acts as the full and final payment at the time of claims settlement, just refuse to do so.
The Insurance Regulatory and Development Authority of India (IRDAI) has recently issued clear instructions to insurance companies that “Under no circumstances the Discharge Vouchers shall be collected under duress, by coercion, by force or compulsion.”
Discharge vouchers, which are often referred to as ‘Settlement Intimation Voucher”, indicate that a claim has been settled amicably between the insurer and the insured. It has been used as proof of settlement indicating that insurer’s liability is over and that the insured is satisfied with the claim amount offered by the insurer for a particular incident.
However, Discharge Vouchers have been a major cause of disputes. Insurance companies have often been accused of taking advantage of the weak spot the policyholders found themselves in at the time of a loss and getting the vouchers signed at a disputed amount thereby trying to absolve themselves of higher payment. Many such disputed cases have gone to higher courts.
“This is a positive step from the IRDAI to protect the interest of the policyholders. This will make insurance companies accountable towards claim in cases where the claim is rejected or claim is not paid in full,” Naval Goel, CEO & Founder, PolicyX.com told FeMoney.
IRDAI directive says if the amount offered is disputed by the insured or claimant, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured or claimant.
However, the regulator has said wherever there are no disputes by the insured or claimant to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature of the insured or claimant.
The IRDAI in September 2015 has said that it has been receiving complaints from aggrieved policyholders that Discharge Voucher are being used by the insurers in Courts pointing out that full and final discharge has been given by the policyholders extinguish their rights to contest the claim.
IRDAI had said signing of a DV does not extinguish the right of a policyholder to contest the claim payment in Courts. “It should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law,” the regulator had said.