1. Total Income : Rs. 1,76,559.28 crores 2. Total Premium Income : Rs. 1,12,307.77 crores 3. Total life fund : Rs. 5,72,602.80 crores
4. Total Assets : Rs. 6,74,514.78 crores 5. Total Investment : Rs. 6,12,705 crores 6. Investment in Infrastructure : Rs. 71,017 crores 7. Policies in force (31/03/2006) : 21.79 crores
Case study
(1)
Life Insurance Corporation of India v/s Mrs. Sunanda Kanthale
According to complainant Sunanda Kanthale, her husband Manoharrao Kanthale who worked as a stores superintendent with the Amravati branch of Maharashtra State Corporation, purchased an insurance policy for Rs 20,000 on November 28, 1992. The policy which was a non-medical one, was scheduled to mature on November 24, 2004, she said. Unfortunately Manoharrao passed away on October 22, 1993, 10 months and 25 days from the date of purchasing the instrument.
Being the nominee in the policy, she asked for her claim for an amount of Rs 40,000 (under double benefit provision in accident cases) and made an application to the Akola Branch Manager of LIC. The senior manager of LIC (Amravati Division) however refused to settle the claim vide his letter dated August 4, 1994. As the policy was a non-medical one, the reason given by the official for not settling the claim was also a bogus one, she alleged. Sunanda then wrote to the area manager of LIC, Mumbai, justifying her claim. The Mumbai office too (vide letter dated April 20, 1995) refused to settle the claim, Kanthale added.
necessary directives to the LIC for paying Rs 40,000 along with 18 per cent interest, a compensation of Rs 50,000 towards mental tension caused and Rs 1,000 towards legal expenses.
Defending the stand taken by the company, the LIC refuted all the allegations made by Sunanda. Manoharrao, who held the policy, had kept the information about his health a secret while purchasing the instrument, the company alleged.
The forum referred to columns 14 and 26 in the application form where the policy purchaser had made statements about his health. The form was duly singed by Dr B R Jain, the forum said. The LIC officials produced proofs before the forum regarding heart disorder of the policy holder and sick leave availed by him after taking the policy. However, they could not prove that Manohar was not well on the day of purchasing the policy. The District Consumers Grievances Redressal Forum has directed Senior Divisional Manager of Life Insurance Corporation (LIC), Amravati, Area Manager, Mumbai, and Branch Manager, Akola, to pay Rs 20,000 to Sunanda Kanthale towards insurance claim besides interest on the amount from October 22, 1993, till the date of payment at a rate of 12 per cent. The forum has also directed LIC to pay compensation of Rs 10,000 to the woman for causing mental tension to her during the four years, after her husband's death, in releasing the insurance amount.
If the insurance company failed to pay the compensation within two months from the date of receipt of copy of the judgment, the company will be liable to pay interest at a rate of 18 per cent on the amount till final payment besides legal expenses of Rs 250, the forum ruled. The forum also ruled that though the compensation amount, demanded by the complainant, appeared exaggerated, considering the troubles she had to face in the last four years for settlement of claim, the company should pay her Rs 10,000 towards compensation.
(2)
Life Insurance Corporation of India v/s Neelam Mehta
The case arose following the refusal of LIC to pay the insurance money following the death of her husband Mahendrabhai Mehta. LIC had repudiated the life policy alleging that he had hid from it that he was suffering from diabetes at the time of taking the insurance policy in december 1993. On 6 November 1994 he died following a heart attack. Neelam told the consumer forum that she came to know that her husband had a life policy with lic three months after his death, when she started receiving 'forms one after another to be filled through lic agent'. She then filled up all the relevant papers.
She also formally informed lic about the death of her husband and claimed the insurance money. thereupon, lic intimated her that the claim for her husband's insurance policy was repudiated because the life assured had 'deliberately' withheld information regarding his 'pre-existing illness which was diabetes' and which, it said, had led to his death. it also alleged that because of this disease he had been hospitalised before his death and that he was a insulin-dependent diabetic. Neelam represented to both the bhavnagar and ahmedabad offices of lic and later to its zonal office in mumbai urging them to recommend her claim to the review committee.
This request was made in september 1996 and till now no decision had been taken and the 'matter is still under consideration'. she also denied that her husband was a diabetic or that he had been hospitalised
preceding his death, she asserted. The forum comprising its president, K.D. Desai, members Leena Desai and Malaybhai Kantharia, found that lic had failed to prove that Mr. Mehta had made false statement and misrepresentation about his health. "the burden of proving that there was suppression of material fact and that it was made fraudulently" lied on lic and it had failed to prove it, the forum observed. LIC therefore was legally and morally duty-bound to pay the claim, it said.
Consumer disputes redressal forum, Ahmedabad, has directed LIC of India to pay up Rs. 50,000 plus 12 per cent interest for seven years, as insurance money due to her after her husband's death. the forum also ordered payment of Rs. 5000 for causing mental agony, hardship and inconvenience to Neelamben. It granted Rs. 3000 as cost.
(3)
Life Insurance Corporation of India v/s Lily Rani Roy
The petitioner has purchased a life insurance policy from the appellate and premiums were paid regularly. The maturity of the said policy was in 1978. Because of some personal reasons the claim was not filed. The petitioner had filed the claim after 13 years of its maturity. The LIC of India rejected the payment on a plea that claim is time barred claim and as such the claim will not be paid.
The petitioner had filed a complaint with Consumer Council with a request to direct the LIC for the payment of the maturity claim as the policyholder had paid the entire premium till the date of the maturity and has the right to receive the claim amount. Assured held LIC guilty under Consumer Protection Act, 1986 Section (I) (g) for deficiency in service.
But, the LIC of India pleaded that the Corporation will be maintaining the records for a period of five years only and the Corporation has received the claim notice from the petitioner in 1990 which is far beyond the time. The LIC also produced a photo copy of the
maturity claims payment register showing the payment of the complainant’s money.
After examining all the facts, the State forum has declared that the petitioners cannot claim the payment of policy as it is already time barred. On the decision of the State Commission, the petitioners have filed a petition with the National Commission.
The National Commission, after verifying the terms of the policy, has opined that though the payment of claim istime barred, the insurance company should have given notice to that effect or should include a clause in the policy document stating that the time barred maturity claims will not be paid. As the Corporation has filed to bring this information to the notice of the policyholder or failed to create the awareness among the policyholders, it has failed in its duties and as such it is liable to pay the claim to the petitioners. Thus, the National Commission has ordered the payment of time barred maturity claims.
Conclusion
The insurance business is major service oriented business in the world. The services offered by the insurance industry is well recognized and utilized by the general public and commercial sector of the world. The life insurance business has covered nearly 40% of the population of the world. Global players with strong brands in the insurance industry today set up their back office operation in low cost countries, manage capital on a global basis, make use of their special skills world wide and use their superior managerial ability to secure leadership positions in the industry.
The claims management is an integral part of insurance. It involves the storage , processing and transmission of information relating to settlement of insurance claims. The use of Information Technology also plays a very important role in claims settlement. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment
between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation which should be solved with due care.
In this fast developing scenario it will not be enough if companies have the futuristic strategies. Implementation of the strategies, effectively adapting them to ongoing changes can spell success. The success of claim management depends on the satisfaction of the customers. The customers are attracted to an insurance company by its state of art claim service. Therefore, before designing an IT system for claim management, customer’s expectations are to be taken in to account. The customers, their needs, knowledge of how the market works, and what they want, these are the things that are important for an insurance company for serving the customers in a better manner through better technology.
Bibliography
The information is taken from various sources such as books, magazines, articles, internet etc.
Books:
Theories and Practices in Insurance Insurance watch
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