IRDAI fines New India for delaying claim settlement

IRDAI has imposed a fine of Rs.3 lakh on New India Assurance for violating various regulatory norms. Among its key violations were delaying claim settlement and offering discount in motor insurance to customers by its intermediary.

While IRDAI has imposed penalty for delay in claim settlement, the insurance regulator has let off the company with a warning for extending discount.

IRDAI found that the general insurer had settled claim after six months of receiving the survey report in a few instances. In fact, the regulator has asked the company to pay interest to the policyholders for delaying payment.

IRDAI norms say that general insurance companies have to settle claim within 30 days from the receipt of the survey report. In the cases of delay in the payment, the insurer is liable to pay interest at a rate, which is 2% above the bank rate prevalent at the beginning of the financial year.

Source: Cafe Mutual