Framework mandates board-approved claim policies, transparent assessments and time-bound settlements to safeguard motor insurance policyholders

Motor insurance complaints fall from 26.18% in FY 2023-24 to 24.8% in FY 2024-25

The sector regulator, Insurance Regulatory and Development Authority of India (IRDAI) has taken various regulatory measures for protection of policyholders’ interests which require insurers to adopt transparent, time-bound and fair claim-settlement processes. The Regulations form the primary legal instrument to prevent arbitrary or coercive practices during motor claim settlement.

The IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024 stipulate that insurers must have board-approved claim-settlement policies, disclose the roles, duties and appointment details of surveyors/loss assessors to the insured, and ensure that all claim deductions and settlements are transparent, reasonable and supported by documentary explanation.

IRDAI has reported that the percentage of complaints in motor segment to total complaints was 26.18% in FY 2023-24, which has come down to 24.8% in FY 2024-25.

Further, out of total 10,156 complaints received by Insurance Ombudsman under motor insurance category during FY2022-23, FY2023-24 and FY2024-25, a total of 9,943 were disposed (awarded, withdrawn and non-entertainable), and rest are under process.

As per provision of the Master Circular on Protection of Policyholders' Interests, 2024, in motor insurance, any loss that less than Rs. 50,000/- need not be mandatorily surveyed by a registered surveyor. Insurers are using App based methodology with AI-Driven assessment for the same.

IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015 provides for monitoring of surveyor performance by insurers, including adherence to the prescribed code of conduct. Insurers are required to examine any reported deviations, undertake necessary enquiries and report established violations to the Authority. Such cases are processed in accordance with the regulatory framework.

Further, IRDAI may suspend a license of a surveyor under various grounds such as failure to discharge the duties and responsibilities in a satisfactory and professional manner, violation of code of conduct specified in the Regulations, acting prejudicial to the interest of the policyholders etc.

IRDAI has also issued 53 cautions and advisories to various surveyors as a part of regulatory action taken on inspection observations during FY2022-23, FY2023-24 and FY2024-25.

This information was given by the Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.

Motor insurance: new IRDAI rules require board-approved claim policies, transparent assessments, time-bound settlements and surveyor oversight. IRDAI requires insurers to implement board-approved claim-settlement policies, disclose surveyor roles and appointment details to insureds, ensure transparent documentary support for claim deductions and settlements, and apply time-bound procedures; losses below Rs. 50,000 may be assessed via app-based AI methods without mandatory registered surveyor involvement, while insurers must monitor surveyor performance, investigate deviations, report violations to the Authority, and IRDAI may suspend surveyor licenses or issue cautions and advisories based on inspection findings.