Proposed insurance regulations opposed

Hubballi: The Hubballi unit of Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA) has opposed the Insurance Regulatory and Development Authority of India (Insurance Intermediaries) (Amendment) Regulations, 2019. The proposed regulations will adversely impact the interest of insuring public and economy of the country, it said.

M N Hegde, coordinator, IIILSA, Hubballi unit, said on Saturday that the Insurance Regulatory and Development Authority of India (IRDAI) has the text of the proposed regulations as exposure draft for opinion of all stakeholders including the public till November 21. “If insurance employees are engaged to interpret the policy contract of which they are the party and also settle the claim, then the outcome would be obviously be inclined towards company’s benefit instead of instead of insuring public. It’s a serious case of conflict of interest and breach of natural justice,” he said.

Bharat Dharamshi, former secretary, IIISLA, South Zone, said that customers not well versed with the fine prints of policy will fall prey as the employee surveyor will either reject or reduce his legitimate claim on the pretext of small and avoidable technical deficiencies. “As a result, the customer will not only suffer but also lose confidence on insurance protection. The cascading effect of this fall out will be similar as seen in the banking sector” he worried.

Sriranga Hanamasagara, former secretary, IIISLA Karnataka chapter, said that in the absence of neutral body like IRDAI and licensed and independent surveyors, such practices will go out of bound like we have seen in agriculture insurance. “The regulation has no mechanism in place to check these malpractices” he mentioned.

The trio said that various committees have made unanimous recommendation that each claim arising out of insurance policy should be settled by an independent and licensed insurance surveyor, but not by in-house employee or surveyor, to avoid conflict of interest.

Source: The Times of India