1. INTRODUCTION :
The Guidelines laid down here are not exhaustive and are of general nature. It may be possible that some of the Guidelines laid down cannot in practice be complied with due to particular circumstances of a case. Such non-compliance need not, therefore, render the claim as invalid. The Claim Setting Authority can use discretion by recording the reasons.
2. APPOINTMENT OF SURVEYOR :
2.1 The Insurance Act stipulates that all claims of Rs.20,000/- and above are to be surveyed by a licensed surveyor. Therefore, for claims less than Rs.20,000 survey by a licensed surveyor is not mandatory. Such losses may be surveyed by the Company’s officials (In-house Survey) if survey is required.
2.2 Ministry of Finance vide Gazette Notification No. Part II Section 3(ii) dated 30/5/70 have exempted certain clauses of claims from the operation of Section 64 UM sub-section (10) irrespective of the claim amount and hence such claims can be processed without insisting on a report from a licensed surveyor.
2.3 The following must be kept in view before a surveyor is appointed for any claim:
a) The surveyor should be holding a valid license.
b) The surveyor should be selected depending upon the type of loss and the nature of the subject matter involved.
c) For assessment of some losses specific technical expertise may be required and consultants having such technical expertise may be associated with the surveyors. The consultants remuneration should be negotiated in advance bearing the expertise in mind. This will be in addition to the survey fee payable.
d) Wherever business interruption losses are involved, the surveyors for the material damage and the business interruption losses. If several, should be competent to complement one another. One surveyor can be utilized for both the losses if the Company is satisfied about the surveyor’s competence for both the jobs.
e) Appointment of Joint Surveyors may be done on the merits of the case.
2.4 Companies may frame guidelines on Authority for appointment of surveyor if they so desire.
2.5 Where a servicing DO is approached for appointment of surveyor even though they are not the policy issuing office, surveyor must be appointed by the servicing DO immediately, with intimation to the policy issuing office.
3. APPOINTMENT OF INVESTIGATOR :
3.1 Depending upon circumstances it may be necessary to appoint an investigator to verify the claimed version of loss. A separate surveyor appointment may be considered if any actual physical survey/assessment is possible and called for.
3.2 The letter appointing the investigator should mention the terms of reference and make it clear that the report should contain no inferences or doubts unless these are well documented and substantiated and can stand the scrutiny of a court if so required.
3.3 In the absence of a laid down schedule of fees for investigators, it is advisable to negotiate and decide the fees to be paid in addition to expenses actually incurred before formally appointing the investigator and the determined/decided fee recorded in the letter of appointment.
4. PROCESSING OF CLAIMS:
4.1 Documents generally required for processing of claims are specified in the respective sections and as far as possible all documents must be called for from the insured in one go and not in piecemeal
4.2 “On Account” Payment: Pending final assessment of a claim an “on account” payment may be considered subject to confirmation of the following:
— Loss due to Occurrence of a peril covered by the policy
— Establishment of liability
— The minimum liability that might arise under the policy.
4.3 After approval of the claim by the competent authority, the insured/claimant should be advised of the final amount of claim approved, with details thereof.
4.4 Remaining formalities of obtaining full and final discharge and bank/financial institution’s discharge (where required) should be completed before release of the amount of claim.
4.5 If the loss or any part thereof is recoverable from a Third Party, a letter of subrogation and/or assignment and special Power of Attorney, to suit special cases, is to be sent to the insured for completion on requisite stamp paper and return before settlement.
5. CO INSURANCE:
The leader will process the claim on behalf of all the co-insurers. A decision by the leader regarding claim settlement, taken at the appropriate level according to the existing tenets of delegation of financial authority, shall be final and binding on the co-insurers. Co-insurer(s), regardless of the amount, will not process claims decided at the appropriate level by the leader again. The leader will intimate to the co-insurer details of a claim settled by him with copies of all relevant reports and documents. The co-insurer will settle his share of the claim within 15 days from the date of receipt of such intimation from the leader without any delay.
In case of a claim requiring Board decision, the decision by the Board of the leader shall be binding on the other co-insurers. There shall be no separate need for the co-insurers to approach their respective Boards for decision in respect of such claims. A suitable note may, however, be placed by the co-insurers before their respective Boards for information in such cases.
6. CLOSE PROXIMITY CASES:
Detailed investigation should be immediately instituted when a loss occurs in close proximity, i.e. within 5 days for all classes of insurance (except marine voyage policies), of the date of inception of risk. The close proximity mentioned here is in reference to new insurance or where there has been a break in insurance. Close proximity investigation should also be carried out in cases where it is found that insurance has been taken out significantly later than it ought to have been taken, i.e. the risk has remained un-insured or inadequately insured prior to the insurance cover under reference.
7. RECTIFICATION OF POLICY AFTER A LOSS:
Rectification of a policy after a loss is reported for reasons other than breach of condition/warranty should be carried out as under:
[a] Where rectification involves collection of additional premium, the additional premium may be charged only on the affected policy period in which the claim has arisen.
[b] Rectification can be done by the Authority Competent for settlement of the claim.
8. REPUDIATION OF CLAIMS:
If a claim warrants repudiation, the competent authority would be the authority competent to settle the claim. Letter of repudiation may state the reasons and/or the policy condition under which it is repudiated.
9. RE-OPENING OF CLAIM FILES:
Reopening of claim file can be done by the authority one step higher than the appropriate claim settlement authority.