IRDAI may allow insurance companies to settle claims arising out of personal accident cover and benefit based health insurance plans through installments instead of a lump sum payment.
In fact, the insurance regulator has constituted an eight-member committee to examine if it makes sense to allow insurers to settle such claims in a piecemeal manner. Suresh Mathur, Executive Director, Health, IRDAI will be the chairman of this committee.
Currently, personal accident cover gives a lump sum amount to the policyholder if an insured meets with an accident and suffers major or minor ailment while benefit-based health plans pay a fixed amount upon the diagnosis of a critical illness. Simply put, these policies aim to ease the financial burden of the family by providing additional funds for medical expenses and treatment.
In a circular, IRDAI has said that the committee will examine
- Need for allowing settlement of personal accident and benefit based health insurance claims in installments by general and health insurance companies.
- If considered, operational procedures to be put in place to protect the interests of policyholders.
- Accounting, actuarial and investment norms that need to be put in place before considering the concept.
The committee is expected to submit its recommendation within two months.