HC asks IRDA to specify roles of TPA in settlement guidelines

Jan 07 2013, 21:55 IST
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Bombay High Court Bombay High Court
SummaryIRDA told the court that it had submitted draft regulations which would be placed before the Ministry of Finance for final approval.

The Bombay High Court today said the Insurance Regulation and Development Authority (IRDA) can go ahead with the process of finalising regulations for settling insurance claims and for the role of Third Party Administrators (TPAs) and powers of Ombudsmen.

The division bench of Chief Justice Mohit Shah and Justice A V Mohta was hearing a public interest litigation filed by social worker Gaurang Damani about the hardships faced by Mediclaim policy holders.

IRDA today told the court that it had submitted draft regulations which would be placed before the Ministry of Finance for final approval.

Directing the IRDA to go ahead with the process of finalising the regulations, the HC asked the authority to specify the role of TPAs and state whether more powers could be given to the Ombudsman while hearing consumer complaints.

"The ombudsman as of now only has power to decide the approval or rejection of a claim but he has not been empowered to impose penalty or increase the claim amount," the Chief Justice said.

The next hearing would be on February 12.

Damani has alleged there are no standard guidelines to settle claims and it is left to the whims and fancies of the TPAs who are in fact not entitled to settle claims but are found to be doing so in several cases.

"TPA receives financial incentives to reduce claim ratio," Damani's petition says, adding there is discrimination in settling insurance claims of individuals and that of corporate clients.

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