IRA pushes for payment of insurance claims in 30 days


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IRA pushes for payment of insurance claims in 30 days


Godfrey Kiptum, CEO of the Insurance Regulatory Authority. PHOTO FILE | NMG

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Summary

  • The Insurance Regulatory Authority (IRA) is proposing to reduce the time it takes to settle claims by insurers to 30 days from the day they are filed by claimants in a new effort to protect consumers.
  • The IRA says that in the new draft rules, the average 90 days it typically takes to resolve complaints is “long” and has led to consumer complaints resulting from a lack of trust and perception. negative from the insurance sector.

The Insurance Regulatory Authority (IRA) is proposing to reduce the time it takes to settle claims by insurers to 30 days from the day they are filed by claimants in a new effort to protect consumers.

The IRA says that in the new draft rules, the average 90 days it typically takes to resolve complaints is “long” and has led to consumer complaints resulting from a lack of trust and perception. negative from the insurance sector.

“More than 70 percent of consumer complaints about insurance services relate to deferred claims settlement. The legal deadline for settling claims is 90 days, ”says the IRA.

“The other markets have a 30-day period on average. The 90-day period is quite long.”

The IRA argues that persistent claims payment delays have hampered industry growth by lowering consumer confidence.

The delays, he says, were fueled by an inefficient claims process, the lack of experts to make loss adjustments in specialized areas (e.g. crop cutters and calculating agents in the agricultural sector), under-capitalized insurers and insurers with low liquidity.

General insurance claims incurred by insurers rose 16% to 59 billion shillings in 2019, from 49 billion shillings in 2015, according to an IRA report.

Its new national insurance policy aims to address delays as well as other challenges that continue to hamper the development of the industry.

The IRA said in October last year that 20 insurance companies or 35% of 56 licensed companies were facing a lack of capital impacting their ability to pay claims on time.

The collapse of several insurance companies over the years has exposed policyholders to risk and loss of benefits, further undermining confidence and hampering industry growth.

The IRA policy, according to Treasury Secretary Ukur Yatani, will address the low level of public awareness about insurance products and services, the low penetration rate and the coverage and concentration of insurance in major urban areas.

It will also discuss the slow adoption of the technology by the industry, the low contribution of life insurance in the overall insurance business, the limited underwriting capacity of the insurance industry and gaps in the legal and regulatory framework.

In addition, it will also seek to remedy the relatively poor financial performance of most general insurance companies and the poor perception of the insurance industry.

About Ellen Lewandowski

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