IRDAI Strengthens Motor Insurance Claim Settlement for Policyholders
The Insurance Regulatory and Development Authority of India (IRDAI) has introduced new regulations aimed at enhancing the protection of policyholders’ interests in motor insurance. These regulations require insurance companies to implement transparent and fair processes when settling claims, ensuring that individuals receive timely and just compensation.
The IRDAI’s new regulations, termed the Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers Regulations, 2024, mandate that insurers develop board-approved policies for claim settlements. Insurers must also clearly communicate the roles and duties of surveyors and loss assessors to policyholders. Furthermore, any deductions in claims must be clear, fair, and substantiated with proper documentation.
Decline in Motor Insurance Complaints
Recent statistics from the IRDAI reveal a positive trend in customer satisfaction within the motor insurance sector. The percentage of complaints lodged in this segment dropped from 26.18% in the fiscal year 2023-24 to 24.8% in 2024-25. This decline signifies improvements in the overall claims process and customer service.
During the fiscal years 2022-23, 2023-24, and 2024-25, the Insurance Ombudsman received a total of 10,156 complaints regarding motor insurance. Of these, 9,943 complaints were resolved through various decisions, including awards, withdrawals, and cases deemed non-entertainable, while the remaining complaints are still being processed.
Efficient Claims Handling for Minor Damages
As part of the new Master Circular on Protection of Policyholders’ Interests, any motor insurance claim involving a loss of less than Rs. 50,000 will not require a mandatory survey by a registered surveyor. Insurers are now leveraging technology, utilizing app-based methods driven by artificial intelligence for assessing such minor claims efficiently.
Monitoring Surveyor Conduct
The IRDAI’s regulations developed in 2015 concerning insurance surveyors and loss assessors outline rigorous monitoring of their performance by insurers. Insurance companies are obliged to address any deviations from the established code of conduct, investigate reported issues, and notify the authority of any infractions discovered.
Violations may lead to serious consequences, including the suspension of a surveyor’s license for unsatisfactory service, code of conduct breaches, or actions that adversely affect policyholders’ interests. The IRDAI has responded to these regulations by issuing 53 advisories to surveyors based on findings from inspections over the last three fiscal years.
This information regarding the advancements in insurance regulation was conveyed by the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, in a recent reply to a question posed in the Rajya Sabha.
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