Insurance companies directed to make timely claims settlements

Insurance companies directed to make timely claims settlements

Staff Writer

The Insurance and Pensions Commission (Ipec) has directed all insurance companies to timely settle claims after an increasing number of policyholders sought the Commissioners intervention due to protracted claims settlement.

Ipec, in a circular, said the situation necessitates urgent attention and action from all insurers.

“In view of the foregoing, from the date of receipt of all the required submissions, a decision shall be made and communicated to the policyholder.

“Further, once the claims authorization process has been finalised, the claim shall be settled within three working days,” said Dr Grace Muradzikwa, the IPEC Commissioner, in a circular.

She said that while the Commission is aware that additional investigations may be required in claims involving complex circumstances and claims recoveries from other insurers or reinsurers, in such cases, insurers are advised to inform policyholders of potential delays and to provide lean explanations for the extended processing time.

“To meet the above, there is a need for insurers to review claims processes by streamlining and optimising claims handling procedures,” said the Commissioner.

Ipec said failure to adhere to the directive attracts a level 4 penalty for each day the insurer is in default in terms of Section 5 of the Insurance and Pensions (Issuance of General Guidelines and Standards) Regulations 2020.

“Furthermore, each insurer is required to maintain a complaints register, clearly indicating the name of the complainant, date of receipt, nature of the complaint, and date of resolution.”

According to Ipec, timely settlement is critical, as this directly impacts policyholder satisfaction, market penetration, and confidence in the insurance sector.

Insurers are expected to conduct thorough evaluations and process claims promptly while ensuring the clarity and transparency of their claims.