Coronavirus is not out of the woods yet and the threat of the third wave is doing the rounds. While maintaining all Covid-19 protocols is the need of the hour, one also needs to ensure there is adequate health insurance coverage to fall back upon in times of hospitalization. But, of late, there have been apprehensions about the Covid-19 related insurance claims not being accepted by insurers or claims getting delayed or partially paid to the policyholders.
Health insurance companies have received a total of 23.06 lakh claims worth Rs 29,341 crore as of August 6, 2021, according to figures compiled by the General Insurance Council. However, insurance firms have settled Rs 17,813 crore involving 18.99 lakh claims so far.
In order to clear the air around insurance claims and the mechanism for the policyholders to raise a grievance, FE Online in an email interview sought the answers around the settlement of claims from Abhishek Tripathi, Managing Partner, Sarthak Advocates & Solicitors. Excerpts:
What is the course of action if a claim is denied? What is the process and timeline before lodging a complaint with the insurer, Ombudsman, and consumer court?
If the claim is denied, the policyholder must inquire about the reasons. Often rejection on the grounds such as inadequate bills or documents can be resolved by submitting the relevant documents.
Against the rejection of a claim, the first recourse is to the grievance committee of the insurer. Although no timeline has been specified for the same, it will be ideal to avail this remedy within 3 years of rejection of the claim to avoid the claim becoming time-barred under laws of limitation.
Against the grievance committee’s decision, the Ombudsman can be approached. The communication from the insurer should specify the details of the Ombudsman to be approached. Ombudsman must be approached within one year from the date of rejection of the complaint by the insurer’s grievance committee.
If the consumer is dissatisfied with the Ombudsman’s determination, (s)he can approach the consumer courts within 2 (two) years.
It is pertinent to note that IRDAI has established an online complaints registering system called the Integrated Grievance Management System (IGMS) where the form with the complaint can be filled and submitted. Complaints submitted on IGMS are forwarded to the insurer as well as IRDAI. IRDAI monitors the disposal of the complaint submitted on the IGMS portal.
In case a claim is partially settled, should one accept and later on approach court etc to settle full dues?
It is common for the insurance companies to seek a letter or undertaking from the insured releasing the insurer of any further claim. It is advisable to avoid giving such undertakings, and where such undertakings are forced, a protest is lodged immediately with the insurer. Partially settled claims can, thus, be accepted under protest, and the courts may be approached for the settlement of the remaining claim. Courts may have to be convinced, in such cases, that the release, if any, executed by the consumer was executed under duress and should be disregarded.
What is the general trend in terms of Covid-19 claims being settled by the insurance companies?
Claim settlement turnaround time has been reduced by most insurers following IRDAI’s directive, however, some concerns around settlement remain. According to the industry data, as of July 19, 2021, of the total reported claims of Rs 27,640 crore, claims worth Rs 16,396 crore were settled. Settlement amounts ranged between 55 percent and 65 percent of the claim.
In the first Covid wave (up to February 22, 2021), insurers reported claims worth Rs 13,736 crore, of which claims worth Rs 7,125 were settled.
In the second wave – from February 23 to July 19, 2021 – of total health insurance claims of Rs 13,905 crore, claims worth Rs 9,271 crore were settled.
As per IRDAI, within how many days should insurers make the reimbursement to the policyholder?
According to the guidelines issued by the IRDAI, insurers are required to settle or reject the claim, as the case may be, within 30 days from the date of receipt of the last necessary document. Where the investigation is warranted, the insurer is required to complete the investigation within 30 days and accept or reject the claim within 45 days of receipt of the last necessary document. If there’s a delay in the payment of the claim, the insurer is required to interest at a rate 2% above the bank rate, from the date the reimbursement is payable.