IRDAI examining shortfall in health claim settlements

MUMBAI : The Insurance Regulatory and Development Authority of India (IRDAI) is closely examining the shortfall in the settlement of health insurance claims, even as more than half of the complaints received under the insurance ombudsman system relate to health policies.Speaking at the Bima Lokpal Day event on Tuesday, IRDAI chairman said that while the number of claims settled by insurers is high, the amount settled in full is sometimes lower than expected. “In health insurance, we continue to see gaps: while the number of claims settled is high, the amount settled, especially in full, is sometimes lower than expected. This is an area we are monitoring closely,” he said.The chairman urged insurers to focus on fairness and transparency in claims handling. “Our expectation from insurers is clear — prompt, fair, and transparent claim settlement. Anything less weakens the trust on which our industry is built,” he said.He noted that general and health insurers together settled 3.26 crore health insurance claims in FY25 and paid Rs 94,247 crore towards settlements. Yet, he said, these numbers must be viewed alongside the growing number of complaints that reflect policyholders’ dissatisfaction with claim outcomes.Data from the Insurance Ombudsman shows that of the 53,230 complaints received in FY24, 54% pertained to the health insurance sector. “Behind every complaint is a person — often someone dealing with illness, loss, or distress,” the chairman said, adding that insurers must aim “not just to resolve complaints, but to prevent them.”He called on the industry to strengthen its internal grievance redressal systems to make them “robust, responsive, and reassuring.” He urged insurers to periodically review the efficiency of their systems and to use feedback from the ombudsman’s office as a guide for improvement.“The internal grievance redressal system of the insurance companies needs to be robust, responsive, and reassuring. I would request all insurance companies to periodically review the efficiency of their grievance redressal mechanism and make necessary changes as and when required,” he said.The chairman also said that IRDAI is encouraging insurers to appoint internal ombudsmen to improve accountability and speed of resolution. “The Authority has already issued an exposure draft and the comments received in this regard are under examination,” he said.Emphasising that every complaint represents an opportunity to restore trust, he concluded, “Every complaint resolved is trust restored. Let us rededicate ourselves to ensuring that every insurance promise is honoured with fairness, speed, and empathy.”