Abstract

Abstract
India’s insurance sector has been growing dynamically in the last couple of
years especially since its privatization in year 2000.
The purpose of this study is to assess the challenges faced by insurance
industry while settlement of claims. Study includes the research work to be
done in the risk prone areas like claims settlement, maturity payments to legal
heirs, early death claims, surrender/withdrawal of policies, annuities/pensions.
In the Indian scenario these areas are very important and it’s the topic of study
because it includes the risk of payment being done to authentic person.
The study thus focuses on these key aspects and problems faced by field
executives, central teams of Insurance companies while settlement of claims
and for the front desk officers while receiving requests from walk-in
customers.
Keywords: Insurance, Annuities, IRDA, NAV, Lock-in period.
Introduction
Indian insurance sector got its’ life in actual sense in year 2000 with the
privatization of insurance sector. This all became possible following the
recommendations of the Malhotra Committee report, in 1999 and
because of this the Insurance Regulatory and Development Authority
(IRDA) was constituted as an autonomous body to regulate and develop
the insurance industry. The IRDA was incorporated as a statutory body
in April, 2000. The key objectives of the IRDA include promotion of
competition so as to enhance customer satisfaction through increased
consumer choice and lower premiums, while ensuring the financial
security of the insurance market.
Life Insurance sector plays a very important role in providing tax benefits
to individuals especially at the end of financial year people often go to
purchase policies.
Due to privatisation many private players came in market with the aim of
providing better services to customers.
Indian Insurance Sector
IRDA is the supervisory and controlling body of insurance sector in India.
Insurance Regulatory and Development Authority of India (IRDAI), is a
statutory body formed under an Act of Parliament, i.e., Insurance
Regulatory and Development Authority Act, 1999 (IRDAI Act 1999) for
overall supervision and development of the Insurance sector in India.
The powers and functions of the Authority are laid down in the IRDAI
Act, 1999 and Insurance Act, 1938. The key objectives of the IRDAI
include promotion of competition so as to enhance customer satisfaction
through increased consumer choice and fair premiums, while ensuring
the financial security of the Insurance market.
The Insurance Act, 1938 is the principal Act governing the Insurance
sector in India. It provides the powers to IRDAI to frame regulations
which lay down the regulatory framework for supervision of the entities
operating in the sector. Further, there are certain other Acts which
govern specific lines of Insurance business and functions such as
Marine Insurance Act, 1963 and Public Liability Insurance Act, 1991.
As of now, Life insurance industry comprises 24 insurers in India.
List includes,
Life insurance corporation of India
HDFC Life Insurance company LTD.
Max Life Insurance company Ltd.
ICICI Prudential Life Insurance company Ltd.
Kotak Mahindra Life Insurance company Ltd.
Aditya Birla Sun Life Insurance company Ltd.
TATA AIA Life Insurance Company Ltd.
SBI Life Insurance Company Ltd.
Exide Life Insurance company Ltd.
Bajaj Allianz Life Insurance Company Ltd.
Indian Life Insurance sector provides a wide range of products in both ulip and
non-ulip categories.
ULIP being a market linked plan vary according with market fluctuations.
Changed NAV plays a very vital role in changing ulip returns.
Nowadays even customers are very well aware with NAV’s and they visit
branches frequently to get to know about fund performance.
In the second quarter of year 2010 ulip lock-in period raised to 5 years from 3
years which brought major change in selling of ulip products in market
insurance and also became very tough from the sales point of view.
Claims of Life Insurers (₹crore)
S. LIC Private Sector Total
Insurer
No. 2019-20 2020-21 2019-20 2020-21 2019-20 2020-21
1 Death Claim 17,505.36 23,878.62 12,288.51 18,079.81 29,793.87 41,958.43
2 Maturity 1,51,159.70 1,65,659.20 21,348.71 25,845.12 1,72,508.41 1,91,504.32
Surrender/
3 70,148.12 80,101.00 47,117.12 49,315.89 1,17,265.24 1,29,416.88
Withdrawal
Annuities/
4 13,015.29 14,571.36 949.42 1,406.32 13,964.71 15,977.68
Pensions
5 Others 932.15 911.63 17,002.32 19,003.52 17,934.47 19,915.15
Total 2,52,760.62 2,85,121.81 98,706.08 1,13,650.66 3,51,466.70 3,98,772.47
Source: Taken from Annual Report IRDA 2020-21
Death Claim
30,000.00
25,000.00 23,878.62
20,000.00
17,505.36
15,000.00
10,000.00
5,000.00
0.00
2019-20 2020-21
LIC
Death Claim
12,288.51
18,079.81
Private Sector 2019-20 Private Sector 2020-21

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Keywords: Insurance, Annuities, IRDA, NAV, Lock-in period.

Source: Taken from Annual Report IRDA 2020-21

Private Sector 2019-20 Private Sector 2020-21

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