NEW DELHI: Congress party's Rajya Sabha MP Vivek Tankha has written to Finance Minister Nirmala Sitharaman seeking reduction in turn around time for settlement of insurance claims from up to six months at present to the shortest possible period, among other measures, to help people amid the COVID-19 pandemic.
He also suggested loan moratorium scheme for families of those who have succumbed to COVID-19.
"This is a perilous time in our country's history, with numerous lives, unfortunately continuing to be lost on a daily basis and the inadequacies of our existing health system have only exacerbated the situation," Tankha said in the letter.
He said it is high time to catch the bull by the horns and ameliorate the suffering of the general population.
"In this regard, repayment of loans and realisation of insurance claims are, perhaps, the two most important financial questions, which the common man face," Tankha said.
He said the Insurance Regulatory and Development Authority of India (IRDAI) and all insurance companies must have in place the necessary online infrastructure and platforms to accept and process all claims and related documents through the online medium only.
Asserting that COVID-19 has proved to be a "penny dropping moment" for customers of the Indian insurance industry, Tankha suggested reduction of the turn around time (TAT) for the settlement of claims.
"Given the present situation, your good offices must step in to ensure that the present system does not continue, in as much as the extent rules by IRDAI dictate 6 months as the highest TAT for disposal of claims, which simply cannot be countenanced presently.
"This needs mandatory review and redressal as families cannot be left in the lurch for 6 long months, more so in cases when the deceased is the sole bread winner," he said.
As some insurance companies are presently providing interim benefits on lodging claims, if the same can be made a universal practice, being mandatory in cases where deaths are caused due to COVID, it will create a feeling of support in the common man by the government, the Rajya Sabha member from Madhya Pradesh said.
He also said some moratorium scheme must be launched immediately for the dependants and nominees of individuals who have lost their life due to the pandemic.
Majorly all loans nowadays are covered with 'secure plans' (general insurance plans covering the loan amount in case of death of the borrower), so it is very unfortunate that two wings of the same ministry are not in sync, that is IRDAI and RBI, Tankha said in the letter dated May 18.
"IRDAI is providing 6-months' time to insurance companies for disposal of insurance cases, in case of death, whereas RBI has refused to provide a single day moratorium to the deceased, for even those whose loans are covered under Insurance," he said.
Thus, concerted efforts and intervention is required so that the various wings of the finance ministry itself do not drift further apart and it is imperative that practical steps be taken to ensure timely disbursal of financial aid to all policy holders/nominees as well as all those who have availed loans, Tankha said.
"The same would go a long way in instilling public confidence in the financial system, whilst also conveying a valuable message that the system is not apathetic to their needs and the prevalent ground reality, but is proactively taking effective steps to redress their legitimate concerns and emergencies," he said, adding that "posterity will not forgive us, if we fail to act at this crucial juncture."