IRDAI Sets Strict Timelines for Insurance Claim Settlement in India

NEW DELHI: You have submitted all documents, responded to emails, and waited for weeks, but still the insurance company says your claim is "under process." Whether it is a health, life, motor, or general insurance claim, the Insurance Regulatory and Development Authority of India (IRDAI) has laid down some strict timelines for insurers to process and settle the claims. If your insurer is delaying the claim without giving a valid reason, you have rights as a policyholder.

What is the standard claim settlement timeline? According to IRDAI regulations, insurers must settle or reject a claim within 30 days from the date they receive the last necessary document. This applies across insurance categories, though the exact process can vary slightly depending on the policy type. IRDAI also says insurers cannot keep asking for documents one by one. All required documents should ideally be requested together at one time.

What if the insurer says the claim is under investigation? Insurers can investigate a claim if they suspect fraud or need further verification. However, IRDAI has imposed limits even on investigations. For health insurance claims, the investigation must be completed within 30 days of receiving the last required document, and the insurer must settle or reject the claim within 45 days from that date. For life insurance claims, IRDAI mandates that the investigation must be completed within 90 days of receiving the claim intimation, and the claim must be settled within 30 days after that.

Can the insurer keep delaying payment without penalty? No. If the insurer delays settlement beyond the permitted 45-day window, it must pay interest on the claim amount. The interest rate is 2% above the prevailing bank rate, calculated from the date the insurer received the last necessary document until the actual payment date. This means insurers face a direct financial cost for unreasonable delays.

Special timelines for health insurance claims IRDAI has introduced faster timelines for cashless health insurance approvals as well. As per the regulator's 2024 Master Circular:

Cashless pre-authorisation requests must be processed within 1 hour

Final discharge approval must be given within 3 hours after the hospital sends the discharge request

The move was aimed at reducing delays faced by patients during hospital discharge.

What if your claim is rejected? An insurer cannot simply reject a claim with a vague message. IRDAI says the company must clearly communicate:

The exact reason for rejection

The policy clause being relied upon

The grievance redressal process available to the customer

Details of the Insurance Ombudsman mechanism

What can you do if your insurer keeps delaying the claim? If the insurer is not responding or repeatedly delaying the matter, policyholders can escalate the complaint step by step:

Raise a written complaint with the insurer's grievance redressal officer

File a complaint on IRDAI's Bima Bharosa portal

Approach the Insurance Ombudsman if the issue remains unresolved

Move a consumer commission or court in serious cases

Insurance companies are not allowed to keep claims pending endlessly without explanation. IRDAI's regulations clearly define how quickly claims should be processed, when investigations can happen, and what compensation is payable in case of delay. So if your insurer keeps saying "your claim is under process" for weeks without valid justification, it may be time to escalate the matter formally.