From now on, insurers cannot deny any claims on the ground of delayed filing and intimation of documents, particularly if the delay was due to unavoidable circumstances.

The Insurance Regulatory and Development Authority (Irda), in a circular to insurance companies, said it had been receiving many complaints that claims were being rejected by the insurers on the ground of delayed intimation and submission of documents.

“The current contractual obligation imposing the condition that claims shall be intimated to the insurer with prescribed documents within a specified time period is necessary for insurers for effecting various post-claim activities like investigation, loss assessment, provisioning and claim settlement. However, this condition should not prevent settlement of various claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances,” Irda said in a circular.

The regulator has asked the companies to incorporate additional wording in policy documents. Terming the current clause as “limited”, it said the insurers should reject claims on the basis of sound logic and valid grounds.

The insurers should treat such claims on “merit” and “good spirit” of the clause, with “utmost care” and “caution”, without compromising on bad claims, Irda said. “Rejection of claims merely on technical grounds and mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation,” it added.