Page 222 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Unit 12: Health and Catastrophe Insurance

Notes

Case Study How to Claim Insurance in Times of Natural Disaster?

he death toll in the devastation in Uttarakhand could eventually far exceed the
number of bodies found. The flash floods would have swept away many, while
Tmany would be buried under the rubble, never to be found. Most of them would be
eventually pronounced as ‘missing’.
In an effort to partially alleviate the pains of survivors and the next of kin of those
‘missing’ in the aftermath of the calamitous flash floods in the hills the Finance Minister,
P Chidambaram, on Tuesday asked the country’s largest life insurer – the government-
owned Life Insurance Corporation, or LIC – not to insist on the usual condition that
requires the passage of seven years in case of missing people before death certificate is
issued.
Addressing an LIC function, Chidambaram said that the public sector insurer can get an
indemnity bond from the claimants in such cases and the claims may be settled on priority
and asked it to constitute a special team to settle claims of those affected in a centralised
basis.

The cases where there is no physical proof of death, claims settlement process may take
many years. “For missing cases, as per the provisions of section 108 of Indian Evidence
Act, presumption of death can be made only after a lapse of seven years from the date of
a person being reported missing. After the lapse of seven years, the nominee or legal heir
has to submit the FIR and non-traceable report issued by police authorities along with the
court order (presuming the death of the person) for settlement of claims, along with other
necessary documents required for deceased claim settlement,” says Vishal Chopra,
Executive Vice President & Head Operations, DLF Pramerica Life Insurance. This has to be
supported by other necessary documents required to process a deceased claim.
While LIC might heed the Finance Minister’s directive of not sticking to the seven-year
period, private sector insurers might hasten the process only if there is a declaration from
government of the missing being “presumed dead”. “If the government announces a
person is ‘presumed dead’ then the company would supersede the usual claim procedure
and settle such claims much faster,” says Chopra.

“Generally a Death Certificate from municipal authorities is required. However, in this
case, we will accept the list issued by hospitals or that issued by police/armed forces in
case a municipal death certificate is not available,” Kalpana Sampat, Chief – Branch
Operations, Underwriting and Claims, ICICI Prudential Life Insurance. Since the dust has
not settled on the tragedy in the hills, most companies have not received any claims.
However, some have already constituted special cells to take care of such cases. “In August
last year when where flash floods in Leh-Ladakh region, our company proactively reached
out to the victim families and settled quite a few claims. However, civilian movement is
still restricted in the Uttarakhand region and it is therefore it is difficult for us to reach
these people,” says Sampat of ICICI Prudential.

In the meantime, the claim care helpline is active round the clock. “We have released
alerts to all our service locations in close proximity to the affected areas. Also, we have
reached out to our policyholders in the affected areas to connect directly with our help line
numbers for any assistance. This would continue till the situation stabilizes,” says Chopra.

Contd...

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