Irdai Imposes Rs 1 Crore Penalty On Care Health Insurance For Claim Settlement Lapses

The Insurance Regulatory and Development Authority of India (Irdai) has imposed a Rs 1 crore penalty on Care Health Insurance following an inspection that revealed systemic issues in its health insurance claim settlement processes. The regulator found that customers often faced unclear deductions, weak documentation, and poor communication regarding their claims. Specifically, the inspection highlighted instances where claim approvals were partial without clear explanations, discharge summaries were incomplete, and coordination between hospitals and the insurer was lacking, leaving customers uncertain about claim statuses.

Beyond claim settlements, the inspection also identified shortcomings in grievance handling, reinsurance entries, and data management. While these issues didn't result in additional fines, Irdai issued warnings and directed the insurer to strengthen controls and improve monitoring at the senior management level. Care Health Insurance is required to pay the penalty from shareholder funds and submit a report detailing corrective actions.

This action signals increased scrutiny from Irdai regarding claim settlement practices within the insurance industry. The regulator emphasized that claim settlement is not merely an operational function, and insurers can expect stricter oversight to ensure transparency and fair treatment of policyholders, especially as the number of insured individuals and claims continues to rise.

(Source：Outlook Money)