IRDA agrees to investigate Covid-19 insurance claims

MUMBAI : The Insurance Regulatory and Development Authority (IRDA) agreed on Monday to investigate Covid-19 policy claims that were rejected by insurance companies.

This comes after Manav Seva Dham (petitioner), a social services trust, filed public interest litigation against several insurance companies in the Bombay High Court.

According to the petition, various insurance providers have been alleged to have committed a series of crimes, misusing policyholders’ funds, diverting funds through additional businesses, and paying exorbitant premium fees to banks and their agents.

“Insurance companies are unfairly denying their claims related to Covid-19, he stated, even in the midst of the current Covid-19 pandemic, in which the country’s residents have not only lost their jobs but also depleted their money. “, said. .

Additionally, the petitioner alleged that the insurance companies have caused illicit losses to the insured.

Essentially, the petitioner asked the court to make an order to ensure that insurance claims submitted by policyholders due to the Covid-19 pandemic were not arbitrarily rejected.

The petition said that due to the widespread pandemic, general insurance companies received a large number of claims from policyholders. The non-life insurance industry received more than 80,000 claims. However, despite having health insurance policies, policyholders’ claims were blatantly denied by these insurance companies on frivolous grounds.

In addition, the social trust alleged that during the second wave of the pandemic, insurers settled only 54% of the claims received from clients who subscribed to additional Covid health insurance as of March 2021.

The petitioner argued that only claims totaling $Insurers have settled Rs 7,900 crore of the total claims for $Rs 14,680 crore under the Covid medical insurance programs.

See also  A Guide to Getting a Free Breast Pump Through Insurance

The rest of the claims were arbitrarily denied without citing any valid reason or specifying the reason for the denial or rejection of the claims by referring to the corresponding policy conditions, the petition states.

While on the other hand, only a handful of people got a share of the total cost of treatment in hospitals as insurance company claims.

The social trust also claimed that it found that policyholders received only 45% to 80% of the hospital’s overall costs because they were embroiled in a fight between hospitals and insurance companies over the treatment of consumables. Despite having comprehensive insurance coverage.

More importantly, in terms of year over year, the growth of insurance companies under the heading of advertisements was outrageous, the petition said. The marketing investment of these companies did not really match the respective investment and scope of these companies.

The petitioner claims that insurance companies’ marketing and client outreach in the private sector is not matched by their marketing spending, and is concerned that these sums are being siphoned off by insurance companies under the guise of advertising. The petitioner compares the above figures with some of the rapidly expanding companies in India with significant operating income and wider customer reach, such as Pidilite and Dabur India.

The petitioner alleged that, pertinently, the general insurance industry wrote premiums worth $1.69 Lakh Crore in FY19 compared to Rs. 1.5o Lakh Crore in the same period last year, registering a growth rate of 12.47%. The trust stated that even with the multiple increase in the insurance premium, profitability has witnessed a startling and unexplained decline.

See also  How inflation can affect your home insurance

“It appears that many general insurance companies are siphoning off policyholder funds under the guise of paying insurance claims and, in all likelihood, may even have created fictitious policyholders to route the money into their own pockets,” said.

The social patronage for the above reasons has requested the court to know and sanction the insurance companies for non-compliance. After hearing both sides, the Bombay High Court disposed of the PIL.

subscribe to mint newsletters

* Please enter a valid email

* Thank you for subscribing to our newsletter.