In a bid to address the widespread property and infrastructure loss caused by the devastating floods in Sikkim (October 2023), the Insurance Regulatory and Development Authority of India (IRDAI) has issued a crucial directive to ensure the expedited settlement of insurance claims. The IRDAI’s measures aim to streamline the claims process and provide immediate service response during these challenging times. Let’s dive into the details of this directive, exploring the steps that insurance companies are advised to take.
Background
The recent floods in Sikkim have left a trail of destruction, impacting homes, businesses, and essential infrastructure. In the face of this catastrophe, the IRDAI recognizes the urgency of supporting claimants and expediting the claims settlement process.
IRDAI’s Directives
In a circular (Circular no: IRDA/NL/CIR/MISC/183/10/2023) addressed to the CEOs/CMDs of all General Insurance Companies and Stand-Alone Health Insurance Companies, the IRDAI has outlined a series of crucial directives for insurance companies:
1. Nomination of Nodal Claims Officer: Insurance companies are advised to nominate a Senior Executive as a Nodal Claims Officer. This officer’s primary responsibility is to oversee the claims response and ensure timely and efficient service. The appointment of the Nodal Claims Officer should be communicated to the Chief Secretary of the concerned State immediately.
2. District Claims Service Head: In districts where there is a high volume of claims, it is recommended that a designated District Claims Service Head be appointed to oversee the claims process. This ensures that the claims in these heavily impacted areas receive special attention.
3. Publication of Contact Information: To enhance transparency and facilitate communication, the contact details of the State/District heads should be published on the insurer’s website. Additionally, insurers are encouraged to provide necessary publicity in the press to raise awareness among the affected population.
4. 24×7 Helplines: Insurers are urged to establish and publicize 24×7 helplines to respond to and assist claimants. This initiative ensures that support is readily available to those in need, day or night.
5. Special Claims Desks: Setting up special claims desks at the district level with delegated Claims Settlement Authorities is recommended for affected areas. These desks will help expedite the processing of claims and facilitate the release of on-account interim payments to aid in the early reinstatement of property and businesses.
6. Swift Claims Processing: It is crucial to ensure that all claims are surveyed promptly, and claim payments or on-account payments are disbursed at the earliest to support claimants during this challenging period.
7. Engagement of Surveyors and Loss Adjustors: Insurers should engage an adequate number of surveyors and loss adjustors immediately. In cases of high claim volumes, resources from neighboring states can also be deployed to ensure that the claims assessment process proceeds without unnecessary delays.
8. Electronic Communication: Policyholders are encouraged to use electronic communication whenever possible for claim initiation and document submission. This streamlined approach aims to expedite claims processing, leveraging digital processes where applicable.
9. Streamlining Documentation: Insurers are expected to review and streamline claims processing by requiring only the necessary documentation to substantiate claim quantum. This measure ensures the expedient final settlement of claims.
Reporting to IRDAI
Additionally, the IRDAI instructs all General Insurers (including Standalone Health Insurers) to submit information related to flood claims to the IRDAI using the specified format on a weekly basis at nl-catastropheirdai.dov.in for one month.
In conclusion, the IRDAI’s directive underscores the critical importance of providing swift and efficient support to individuals and businesses affected by the Sikkim floods. These measures not only streamline the claims settlement process but also ensure that claimants receive the necessary assistance and support during these challenging times. The focus is on expediting claim settlements to help people recover and rebuild their lives in the aftermath of this natural disaster.
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Insurance Regulatory And Development Authority Of India
Press Release
IRDAI advised Insurance Companies to settle Sikkim flood Claims on Fast Track
The Floods in Sikkim have caused widespread loss to property (homes and businesses) and infrastructure. The Sector Regulator IRDAI issued instructions to all General Insurers and Standalone Health Insurance Companies to mobilise all resources to ensure immediate service response including engaging the services of Surveyors, Loss Adjustors and Investigators for quick settlement of claims arising out of the havoc created by the floods.
The insurers have been advised to communicate the nomination of a Senior Executive to the Chief Secretary immediately. Districts reporting large numbers of claims to oversee by a designated District Claims Service Head. The insurers to give wide publicity on the contact details of these officers in their websites and also in the media.
Insurers are advised to respond/assist the claimants through their 24×7 helplines, special claims desks at district level with delegated Claims Settlement Authorities for speedy processing and settlement of claims. Insurers have been advised to settle claim payments/on account payments at the earliest and also encourage policyholders to use electronic communication wherever possible for correspondence.
Insurance Regulatory And Development Authority Of India
Circular no: IRDA/NL/CIR/MISC/183/10/2023
18th October, 2023
All CEOs /CMDs of all General Insurance Companies, and Stand-Alone Health Insurance Companies
Re: Insurance claims relating to Floods in Sikkim
The Floods in Sikkim (October 2023) have caused widespread loss to property (homes and businesses) and infrastructure.
2. General Insurers and Standalone Health Insurance Companies are advised to mobilise all resources to ensure immediate service response including outsourced functions such as Surveyors, Loss Adjustors and Investigators. Specifically:
a. Nominate a Senior Executive to act as the Nodal Claims Officer overseeing the claims response. The Nodal Officer appointment should be communicated to the Chief Secretary concerned of the State immediately.
b. Districts reporting large numbers of claims may be overseen by a designated District Claims Service Head.
c. The contact particulars of the State / District heads should be published on the Insurer website and necessary publicity may be also given in the press.
d. All Insurers should also activate, publish 24×7 helplines to respond / assist Claimants and launch extensive awareness campaign duly highlighting the measures taken.
e. Special Claims Desks at District level with adequate delegated Claims Settlement Authorities are recommended to be set up for affected areas to facilitate speedy processing of claims and settlements including release of on-account interim payments to assist early reinstatement of property/ businesses.
f. It needs to be ensured that all claims are surveyed immediately and claim payments/ on account payments are disbursed at the earliest.
g. Adequate number of Surveyors and Loss Adjustors be immediately engaged and if needed, resources from neighbouring States may be also deployed.
h. Insurers shall encourage Policyholders to use electronic comm unication wherever possible for correspondence while initiating the claim and filing all the relevant documents. Efforts shall be made to ensure that digital processes are resorted to the extent possible for assessment of claims.
i. Insurers are also expected to review and streamline processing of claims by ensuring only such documentation necessary to substantiate claim quantum, to ensure expeditious final settlement.
3. All General Insurers (including Standalone Health Insurers) are advised to submit information related to the flood claims to the IRDAI in the format attached on a weekly basis at nl-catastropheirdai.dov.in for a month.
