Life Insurers asked to maintain transparency in publishing death claims paid

IRDA directed the Life Insurers, via a circular to follow transparency in projecting death claim settlement in advertisements. The circular mentions, “It has been observed that insurers are following different methods to arrive at death claims paid data (death claims paid ratios), while publishing them in insurance advertisements. In order to have uniformity across the industry, the life insurers should use or publish only annual figures of death claims paid ratios, based on the number of policies alone.” If an insurance advertisement contains death claims paid, then the data for individual and group polices shall not be clubbed together. The advertisements for group products should reflect only group death claims paid, while individual products should reflect only individual death claims paid. For advertisements promoting the company’s brand without reference to products, only individual death claims paid should be used. According to IRDAI’s data, in 2015-16, life insurance companies had settled 8.54 lakh claims on individual policies with a total payout of Rs. 12,636.66 crores. The claims settlement ratio of LIC was better than that of private life insurers. It had increased to 98.33 % during 2015-16 against 98.19 % in the previous year. In the group life insurance, the total claims were 5, 45,337, while 14,388 were pending.