Contract of insurance are in the nature of contract of indemnity and it entitles the insured for the reimbursement of actual loss in terms of the insured perils and policy condition. The Insurance Act, 1938 and Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002 prescribe guidelines for settling of claim by the insurance co. Section 64 UM (2) of the Insurance Act, 1938 mandates that no claim in respect of a loss equal to or exceeding twenty thousand rupees in value on any policy of insurance be admitted for payment, unless the insurer obtains a report on the loss that has occurred from a person who holds a license issued under sub-section (1) of Section 64-UM of the Act as a ‘surveyor’ or ‘loss assessor’. The proviso to sub-section (2) however, retains the right of the insurance co. to settle a claim for an amount different from that assessed by the surveyor. This proviso further permits the insurance co. to obtain a second or further report where considered appropriate or expedient in the circumstances of a case, based upon which the claim could be settled for a different amount than as assessed earlier. Regulation 9 (5) of IRDA (Protection of Policyholders’ Interests) Regulation, 2002 provided that on receipt of the survey report, the insurance co. shall settle the claim within 30 days from the receipt of the report and if or any reason claim is not maintainable, the reason for the same be also communicated within 30 days.
Relevant Provisions:
“Section 64UM Licensing of Surveyors and Loss Assessors
This story is from the August 2020 edition of Legal Era.
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