A complaint lodged by Ms Kunti Devi, was received by IRDA on 14th April, 2009 regarding non receipt of death claims. The complaint was forwarded to the Life Insurer on 28/07/2009.The Life Insurer vide its letter dated February 05, 2010 informed the repudiation of the death claim due to non disclosure of ‘material facts’ which was material to disclose. From the submissions of the life insurer it is noticed that the claim was repudiated after a gap of around 12 months from the date of receipt of claim intimation.

An investigation carried out by IRDA on 18th June, 2010 revealed that the time line adhered by the life insurer to decide on the death claim is on a higher side. It was also noticed during the course of investigation that more than 6 months was elapsed in respect of a few more individual death claim cases without deciding the admissibility of the death claims and in respect of a group insurance policy one claim is outstanding for more than one year.

Decision
Wherever delays have taken place in taking decisions on the settlement of death claims, it is considered that the Insurer has failed to adhere to the within referred regulations. The violation of the referred regulations invites a penalty under Section 102(B) of the Insurance Act 1938 and the Authority is empowered to impose a penalty not exceeding Rs.5 lakh for each such violation and punishable with fine. Considering the nature of the violation, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs.5 lakh. Accordingly, a penalty of Rs 5 lakhs is imposed on the HDFC Standard Life Insurance Co Ltd.


The Life Insurer is also directed to put in place effective claim settlement procedures and take all such measures that deem fit for both pro-active and timely settlement of all types of claims. The procedures and measures shall fully comply with the regulations referred above. The Life Insurer shall confirm the action taken towards this direction within 15 days from the date of receipt of this order.

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