Ahmedabad, Jun 18 (PTI) The devastating Air India 171 plane crash, which claimed 241 lives on board and 29 on the ground, has created an unforeseen challenge for insurance companies to settle some claims where even the designated nominees have also died in the accident.

This has added another layer of administrative burden for grieving families, while the insurance industry is navigating uncharted territory striving to balance due diligence with compassionate expediency.

The Insurance Regulatory and Development Authority of India (IRDAI) has issued directives to fast-track claims.

In its June 14 circular, IRDAI asked all insurance companies to submit weekly updates on claims from June 16 onwards and further directed them to appoint nodal officers, waive formalities such as FIRs and postmortem reports, and expedite disbursals under life and personal accident policies.

There have been some cases where the entire family has perished or both spouses died in the crash, which are making the claims process particularly complex.

Major insurance providers, including Life Insurance Corporation of India (LIC), New India Assurance, HDFC Life, Iffco Tokio General Insurance, Bajaj Allianz General Insurance Company (GIC), and Tata AIG Insurance, quickly set up help desks at the Ahmedabad Civil Hospital to expedite the process. They are actively matching data from authorities with their records and proactively reaching out to affected families.

However, while other cases were streamlined, complexities arose in instances where both the policyholder and their nominee died in the crash.

Aamir Khan Pathan, Administrative Officer (Claims Department) at LIC, the country's largest insurer, highlighted this challenging scenario saying "in a few cases, the husband and wife both perished in the crash and had nominated each other as their policy".

Ashish Shukla, another Administrative Officer with LIC, said that out of 10 claims received so far, one involves a situation where the insured nominated their spouse, and both died in the accident.

Similarly, Manpreet Singh Sabharwal, Manager (Claims) at Iffco Tokio General Insurance Company, cited a case where a company director and his wife died, with the wife being the nominee.

Nischal Buch, Principal Officer, Zonal Operations, Tata AIG, also reported one such case among the seven claims his company has received.

Typically, when both the insured and nominee die, insurance companies require a succession certificate to identify the rightful heirs. However, given the extraordinary circumstances of the air crash, companies are making exceptions.

"If both the insured as well as the nominee have died, we look for Class I heirs, which is typically the blood relatives like children," Shukla from the LIC explained.

"If there are multiple children, then we take a declaration from the heirs on how the claim is to be settled and an indemnity bond has to be submitted to the company," he said.

Buch added that their legal team is exploring the possibility of seeking joint declarations from all heirs to streamline the process in these complex cases.

The impact of the crash extends beyond life insurance.

Prakash Khanchandani, Administrative Officer with The New India Assurance, stated that his company has received seven claims: five related to personal accident policies and two for marine cargo that was onboard the flight. One marine cargo claim, worth Rs 6,50,000, has already been settled. For personal accident policies, nominees are still in the process of submitting details as families deal with the aftermath of losing loved ones.

Bajaj Allianz reported four claims, including a marine cargo claim of Rs 55 lakh and three travel insurance policies, each for Rs 10 lakh, all involving passengers who perished in the accident.

"We have currently settled three claims under our Travel Personal Accident insurance. In addition, one claim has been registered under our Marine Cargo insurance," the company told PTI in response to a query. PTI PR SKL GK