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  Study Material IC-11-3

PRACTICE OF GENERAL INSURANCE IC-11

QUESTION-ANSWERS

Q.1. Discuss the claim procedure in respect of a general insurance policy as prescribed by Regulation 9 of the IRDA Regulations, 2002.

Claim procedure in respect of a general insurance policy as prescribed by Regulation 9 of the IRDA Regulations, 2002 as follows:

a) An insured or the claimant shall give notice to the insurer of any loss arising under contract of insurance at the earliest or within such extended time as may be allowed by the insurer. On receipt of such a communication, a general insurer shall respond immediately and give clear indication to the insured on the procedures that he should follow. In cases where a surveyor has to be appointed for assessing a loss/claim, it shall be so done within 72 hours of the receipts of intimation from the insured.

b) Where the insured is unable to furnish all the particulars required by the surveyors or where the surveyor does not receive the full cooperation of the insured, the insurer or the surveyor as the case may be, shall inform in writing the insured about the delay that may result in the assessment of the claim. The surveyor shall communicate his findings to the insurer within 30 days of his appointment with a copy of the report being furnished to the insured. In special circumstances of the case, either due to its special and complicated nature, the surveyor shall under intimation to the insured, seek an extension from the insurer for submission of his report. In no case shall a surveyor take more than 6 months from the date of his appointment to finish his report.

c) If an insurer, on the receipt of a survey report, finds that it is incomplete in any respect, he shall require the surveyor under intimation to the insured, to furnish an additional report on certain specific issues as may be required by the insurer. The insurer may make such a request within 15 days of the receipt of the original survey report provided that the facility of calling for an additional report by the insurer shall not be resorted to more than once in a claim.

d) The surveyor on receipt of this communication shall furnish an additional report within three weeks of the date of receipts of communication.

e) On receipt of the survey report or the additional survey report, an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer, for any reasons to be recorded in writing and communicated to the insured, decided to reject a claim under the policy, it shall do so within a period of 30 days from the receipt of the survey report or the additional survey report, as the case may be.

f) Upon acceptance of an offer of settlement as stated in Sub Regulation (5) by the insured, the payment of the amount due shall be made within 7 days from the date of acceptance of the offer by the insured. In case of delay in the payment, the insurer shall be liable to pay interest at a rate, which is 2% above the bank rate prevent at the beginning of the financial year in which the claim is reviewed by it.

Q.2. What is a Banker’s Indemnity Policy?

This policy provides indemnity against the following contingencies:

?"> i.Loss or destruction of money and or securities by fire, burglary, theft, robbery or hold-up, riot and strike.

?"> ii. Loss by theft misappropriation of money and or securities whilst they are in transit. The cover is operative even if the loss is caused by the negligence or fraud of the insured’s employees.

?"> iii. Direct financial loss assumed as a result of payment of fictitious, forged or raised cheques.

?"> iv. Dishonest or criminal acts of employees in respect of money and securities.

?"> v. Fraud and/or dishonesty of the insured’s employees in respect of goods hypothecation/pledged to the insured bank.

Excess clause is incorporated In respect of each and every loss. The policy is issued on discovery basis, i.e. the policy will respond during which the loss was discovered and not necessarily during which it occurred. Further the policy provides for retroactive cover for a maximum period of two years.

Q. 3. Mention six Amendments of insurance Act made by IRDA Act, 1999.

Following six Amendments were made in the Insurance Act by IRDA Act.

a. According to the new provisions, the minimum requirement of paid-up share capital is to be Rs. 100 crore for the life and general insurance business and Rs. 200 crore for the re-insurance business.

b. Section 6A is amended making the maximum holding of share by individual promoter to be not more than 26% of the share capital and the interest of the foreign company or non-resident not more than 26% of the share capital.

c. The Act has prescribed the maximum investable funds and types of securities to be invested.

d. New Section 32B and 32C are mandatory provisions that the insurers should take part in the rural insurance business to cover the risks of crops and agriculture, machinery and other rural non-traditional business and insurance for backward and socially neglected people below the poverty line.

e. A new section containing procedural provisions in relation to the investigations as per the directions of the Authority, or the Central Government in response to the complaint from the policyholder or the shareholders of the company.

f. A new section 42D provides for issue of licenses to the intermediary or insurance intermediary.

Q.4. Discuss the essential of good after-sales service in the context of insurance business.

Following are the essentials of good after-sales service:

?"> i. Prompt issue of claim form

?"> ii. Prompt appointment of loss of surveyors

?"> iii. Complete advice to the insured on the claims procedure and claims documentation. If multiple requirements are involved, the insured should be notified at the very first instance, as far as possible and not periodically in installments.

?"> iv. Control over surveyors to ensure that they submit their report without undue delay.

?"> v. Expeditious processing of relevant documents, survey report, etc., decision making and payment of the claim.

Agent and Marketing staffs also have a role to play at this stage. Post-settlement service consists of advising the client to take remedial steps to avoid recurrence of the similar losses, reinstatement of sum insured.