The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of Rs. 1 crore on Care Health Insurance due to lapses in its health insurance claim settlement process. The regulator found that the insurer failed to provide adequate reasons for claim repudiation or for paying reduced amounts to policyholders. Instead of providing concrete evidence, the insurer relied on email logs, which were deemed insufficient and unreliable.
IRDAI also discovered that Care Health did not obtain signatures from patients or their attendants on crucial claim documents, such as discharge summaries and final bills. This lack of confirmation from policyholders led to uncertainty regarding the documents used for claim settlement. Furthermore, the insurer applied hospital discounts only to the portion of the bill admissible under the policy, rather than to the full hospital bill, resulting in reduced benefits for policyholders.
The regulator viewed these practices as unfair treatment of customers and a lack of transparency and accountability. In addition to the fine, IRDAI issued warnings for other regulatory violations, including deficiencies in grievance redressal, delays in addressing cybersecurity vulnerabilities, accounting lapses in reinsurance arrangements, and failure to promptly transfer unidentified proposal deposits to the unclaimed amounts account. However, these violations did not attract any financial penalty.
The fine and warnings serve as a reminder to insurance companies to adhere to regulatory guidelines and maintain transparency in their claim settlement processes. The IRDAI’s actions aim to protect the interests of policyholders and ensure that insurance companies operate fairly and efficiently. The regulator’s scrutiny of Care Health Insurance’s practices highlights the importance of accountability and transparency in the insurance industry. By imposing penalties and issuing warnings, IRDAI is working to promote a fair and customer-centric insurance market in India.