Insurance brokers can offer up to Rs 10 crore without prior Irdai nod

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New Delhi | Published: September 7, 2017 3:01:54 AM

The Insurance Regulatory and Development Authority of India (Irdai) will soon come out with regulations that would allow insurance brokers to offer claim consultancy up to Rs 10 crore without the prior approval of the regulator.

Insurance brokers, investmentsFor claims above Rs 10 crore, the brokers would need to take approval from Irdai. (Reuters)

The Insurance Regulatory and Development Authority of India (Irdai) will soon come out with regulations that would allow insurance brokers to offer claim consultancy up to Rs 10 crore without the prior approval of the regulator.

For claims above Rs 10 crore, the brokers would need to take approval from Irdai.

Sanjay Kedia, president of the Insurance Brokers Association of India (IBAI), said: “This point was discussed in the last board meeting of Irdai and our demand has been largely been agreed by the regulator and we welcome the move.” He was speaking at the launch of new volume of its “General Insurance Claim Insights for Policyholders: A Handbook” on September 06, 2017.

Claim consultancy services will provide for efficient liaisoning with the insurance companies so that the claims can be settled on time. Senior officials in the insurance industry say that, this move will ensure that policy holders do not approach unauthorised agencies to get assistance for claims. “We have been verbally told regrading the change in regulations and we are happy with the move. Going forward we hope that, regulator remove all the restrictions of prior approval of above `10 crore for claim consultancy services,” said a senior official.

Data from the handbook showed the claims settlement ratio is the highest by the New India Assurance, at 70.97%, among the  public sector insurance companies, while Royal Sundaram’s claims settlement ratio stood at 70.79% among large private general insurance companies. Insurers are evaluated and ranked basis the above five criteria for individual lines of business such as fire, marine cargo, marine hull, motor own damage, motor third party, health and niscellaneous, and for all lines of business combined.

The handbook intends to capture data in these parameters and present it in a lucid and accessible manner, which would help policyholders in making an informed decision while choosing a general insurance policy.

However, claims settlement ratio for motor third party has been very less for the entire industry, the data suggests that, claims settlement ratio is below 20% for general insurance companies. While in health insurance claims settlement ratio for New India Assurance is 83.83% in public sector insurance companies.

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