Beware of Clauses in Policy Without IRDA Nod'

Beware of Clauses in Policy Without IRDA Nod'

CHENNAI: Beware! Your insurance company may be incorporating clauses in the policy which are not in conformity with the approval granted by the Insurance Regulatory and Development Authority (IRDA) of India.

Speaking at an event in the city on Monday, Insurance Ombudsman Virander Kumar urged  insurance holders to check the IRDA website regarding terms and conditions before opting for a policy. Citing an example, Kumar recalled a case where a private firm refused to pay claims to the relatives of the insured person because he was murdered. “As per terms and conditions of the company, the claims could not be paid to the family of insured, as it is culpable homicide,” said Kumar.

When the Ombudsman sought the original terms and conditions approved by IRDA from the insurance company, it was found that the clause was not included. “It was incorporated without regulatory approval. As a result, we asked the company to pay Rs 10 lakh to the insured,” he said.

There are also several cases where insurance firms reject claims on rather flimsy grounds. Kumar says insurance companies usually do not provide to the customer details about charges in policy. Although it is mandatory for the insurer to provide annual statement of funds, it is seldom followed, he said.

Recounting another instance, he explained a case where a private company allegedly tried to cheat a 60-year-old after insuring him for life time.

“This was repudiation of death claim of the life assured. The company rejected the claims stating that there are no funds though the insured has been paying the annual premiums for the last five years as per the premium paying terms of the policy,” said Kumar.

“When probed, it was found that the company was charging 300 per cent mortality charges without the consent of the insured. The policy continued when there was no fund value to cover the mortality charges. It was terminated five years ago without the consent of the insured. This too when the premium was insufficient to cover the monthly charges for the full year,” said Kumar

When the Ombudsman sought the details about the confirmation of the product approval of IRDA along with policy wording, terms and conditions, the insurer failed to provide it.

“However, they found it convenient to settle the claim by Rs 24.75 lakh and the person withdrew the complaint,” said Kumar.

Kumar said there could be many individuals who had bought policies and are facing similar plight but don’t know whom to approach for remedy.