E-Settlement System by IRDA – A convenient way to Settle Policy Claims
Life is uncertain and is packed with surprises. To minimize the financial impact of unfortunate events in life, it is recommended to purchase a life insurance policy. There are several such life plans available in the market that not only provide you with the benefit of income replacement in your absence but also offer capital appreciation over the paid premium.
Internet is packed with information about tips and ways to choose a life insurance plan; however, very few sources speak about the settlement process. Settlement process is somewhat similar to every insurer, be it LIC, MaxLife, Aviva, etc. This process has to follow the IRDA guidelines set for insurers.
IRDA has set flexible guidelines for insurers and insured people with reference to the settlement criteria. Yet numerous amount of insured seem to have worries when it comes to settlement of claims. Moreover, issues arise whenever there are discrepancies in the documents to be submitted along the claim settlement forms.
Apart from the discrepancies in the settlement process, significant amount of time passes away in the settlement process. To reduce all such discrepancies related to the settlement process, IRDA has decided to draft guidelines for implementing the e-settlement system.
With an effort to take this initiative forward, it has released draft guidelines on participation in ETASS or Electronic Transaction Administration and Settlement System. "The authority intends to provide the regulatory framework governing various aspects of conduct of the ETASS system," these are the words of IRDA chairman as mentioned on IRDA’s website. After declaring this, the regulator has requested the existing insurers such as MaxLife, Aviva, LIC, to provide feedback on this topic.
This system would be setup for co-insurance and re-insurance transactions. The development of this system is still in progress; first units to be launched for public use will include fire insurance portfolio. This centralized system will make it imperative for general insurers, reinsurance brokers, and reinsurers to register with ETASS and co-insurance and re-insurance business.
With this system in action, issues arising at the time of claim settlement would be significantly reduced. As all documents will be held in electronic format, there will be no room for errors or document loss, thus speeding the process of settlement.