Definition: Review of claims by insurance companies to determine

liability and amount of payment for various services. The review may
also include determination of eligibility of the claimant or beneficiary or
Insurance Claim Review
of the provider of the benefit; determination that the benefit is covered
or not payable under another policy; or determination that the service
was necessary and of reasonable cost and quality.
Other names Insurance Claims Processing; Insurance Audit; Claims
Review; Reviews, Insurance Claim; Reviews, Claims; Processing, Insurance
Claims; Insurance Claim Reviews; Insurance Audits; Claims Reviews;
Claims Processing, Insurance; Claims Analyses; Claim Reviews, Insurance;
Audits, Insurance; Audit, Insurance; Analyses, Claims; Review, Insurance
Claim; Review, Claims; Claims Analysis; Claim Review, Insurance; Analysis,
Claims s

Insurance Claims Introduction

The insurer promises to save the insured are nominees/assignees of the insured on happening of
event or risk insured. Disputes crop up in the mpayment of claim when the insurer and the
insured understand the process of claims payment in adifferent way. Claims settlement is an
integral part of the insurance business which is a serviceindustry and its growth is interwoven
with the people, the customers and consumers of service. Itis inevitable for the insurance
company to protect and guard the interests of the policyholders.An insurance claim is the only
way to officially apply for benefits under an insurance policy, butuntil the insurance company
has assessed the situation it will remain only a claim, not a pay-out.Claims ManagementMany
insurers have recognized the need to improve the efficiency of their claimsmanagement process.
They have streamlined processes, eliminated paper-based forms andredistributed work to match
the demands to skills. The objective of their efforts is to lower costs,while also increasing overall
throughput. Efficiency improvements make tasks quicker and lesscostly to execute. However, to
realize even greater improvements in the claims handling process,insurers must also focus on the
effectiveness of their claims decisions.Claims handling costs typically represent 10% to 15% of
net earned premium; in contrast,claims payouts represent 40% to 65%. Insurers that expand their
focus to include effective aswell as efficient claims processing will find a far larger pool of
savings opportunities.Technology can play a significant role by providing integrated channels for
communication andcollaboration. This would help the insurance company increase employee
productivity byreducing cycle time and defect rate and also increase employee participation and
compliance.Claims Processing sometimes involves collating and sharing large amounts of
informationamong multiple parties involved in a claim, from body shops to adjusters to
investigators tolawyers and doctors to claimants and regulators. And it involves the knowledge of
experiencedadjusters to determine the fair and appropriate outcome of a claim. In fact, losses and
lossexpenses absorb 80% of premium collected by carriers.

Service representatives and claims adjusters need to access data from multiple sourceswhen
processing or assessing a claim, which delays settlement time and increases costs. Manualsteps
reduce transparency of the claims process and raise the risk of fraud, manipulation or simply
human error. Customer retention is also a challenge experts say that 75 percent of customers
leave their insurer due to claims issues.System of claims managementBasis of claims
management:Claims management means and includes all the managerial decisions and
processesconcerning the settlement and payment of claims in accordance with the terms of
insurancecontract. It includes carrying out the entire claims process with a particular emphasis
onmonitoring and lowering the claims costs. The important elements of claims management
areclaims preparation, claims philosophy, claims processing and claims settlement.The claims
philosophy is defined as procedure or specifiedapproach to settle the c

If you have an insurance policy on your home, life, health or car, and have kept up regular
payments (called premiums) to the insurance company, the time may come when you need to
make a claim. An insurance claim is an application for benefits provided by an insurance
company. With this application you are asking the company for money to be given to a hospital,
or other service. Once the insurance company receives your claim they will perform an
assessment of the situation and decide whether or not to pay the amount requested.
Generally, you will file an insurance claim with a local representative of the insurance company.
This agent will investigate the specific details of your insurance claim and will act as the gobetween for your negotiations with the main insurers. In many situations a recognized authority
such as a doctor, repair shop, or building contractor will be able to file your insurance claim
forms directly with the insurance company.
Sometimes after you file your insurance claim, the insurance company may send out an
investigator, called an adjustor or appraiser. His job is to evaluate your insurance claim and
figure out if the estimates are reasonable. Insurance companies do this to prevent possible
dishonesty by contractors who may present inflated estimates.
There are a number of reasons an insurance company may not accept a claim. Of course, they
wont pay if your premiums have not been fully maintained. In case of an automobile accident
when another insurance company has already agreed to pay for damages, your claim will be

refused, as it will if your claim falls into an area that is not specifically covered in your policy. If
the reason for your claim is carelessness or an unavoidable "Act of God" payment will be
withheld.
When the insurance company has assessed the situation and agrees to pay your claim, it will
become a pay-out.

What is an 'Insurance Claim'

An insurance claim is a formal request to an insurance company asking for a payment based on
the terms of the insurance policy. The insurance company reviews the claim for its validity and
then pays out to the insured or requesting party (on behalf of the insured) once approved.
Insurance claims cover everything from death benefits on life insurance policies to routine health
exams at your local doctor. In many cases, third parties file claims on behalf of the insured
person, but usually only the person(s) listed on the policy is entitled to claims payment.
BREAKING DOWN 'Insurance Claim'
A paid insurance claim serves to indemnify a policyholder against financial loss. An individual
or group pays premiums as consideration for completion of an insurance contract between the
insured party and an insurance carrier. The most common insurance contracts revolve around
costs for medical goods and services, physical damage or liability resulting from the operation of
automobiles, property damage or liability from home ownership, and the loss of life.
Health Insurance Claims
Costs for a surgical procedures or inpatient hospital stays remain prohibitively expensive. In
2014, the average cost across the United States for a day in a hospital sat at $2,212. Individual or
group health policies indemnify patients against financial burdens that may otherwise cause
crippling financial damage. Health insurance claims filed with carriers by providers on behalf of
policyholders require little effort from patients, as 94% of medical claims were adjudicated
electronically in 2011, a 19% increase from 2006. Policyholders must file paper claims where
medical providers do not participate in electronic transmittals but charges result from covered
services rendered by professionals or facilities. Ultimately, an insurance claim protects an
individual from the prospect of large financial burdens resulting from an accident or illness.
Property and Casualty Claims
A home is typically one of the largest assets an individual owns. A claim filed against damage
from covered perils is initially routed via phone or the internet to a representative of an insurer,
typically an agent or claims adjuster. Unlike health insurance claims, the onus is on the
policyholder to report damage to a deeded property he owns. An adjuster, depending on the type

of claim, inspects and assesses damage to property for reimbursement to the insured. Upon
verification of the damage, the adjuster initiates the process of reimbursing the insured.
Life insurance Claims
Life insurance claims require the submission of a claim form accompanied by a death certificate.
The process, especially when claims involve high face amounts, may require in-depth
examination by a carrier to ensure that the death of the covered individual did not fall under any
exclusion contained in the contract, such as suicide or death resulting from a criminal act.
Generally, the process takes about 30 to 60 days without extenuating circumstances, affording
beneficiaries the financial wherewithal to replace the income of the deceased or simply cover the
burden of final expenses.

The Importance of Claims

February 23, 2011 James Dickey 1 Comment
Insurance is a promise a promise to pay for covered damage exactly as specified in the policy.
At the end of the day all we have is that promise. If we dont make good on it, then we really
dont have anything to offer.
Since weve been in the insurance business for decades, weve seen people try to take shortcuts
with claims. Those people were incredibly short-sighted. It ALWAYS comes back to bite them in
the end as it should.
At iMGA we take proper claims handling seriously, as do our carriers. Our claims are handled by
two highly respected third party administrator firms, and the presidents of those firms serve on
our Board of Directors. This gives us a direct line to their top management (should it ever
become necessary), but also reflects our commitment to proper claims handling.
As an agent your reputation is also on the line when an insured has a claim. With iMGA you can
be confident that we give claims handling the proper weight and attention to keep your
reputation secure.

The Importance of Claims Service

Claims represent the value payable to the insured person in an event of loss of insured property.
These claims are filed by the policyholder directly with the insurance company or by brokers or
agents representing the policyholder. This is usually the essence upon which
insurance claims service is designed to restore normalcy to the afflicted and insured persons.
This can also be looked at as the filing of compensation as stipulated in the insurance contract
between the policyholder and the insurance company.
Once a claim has been forwarded to the insurance company by the insured person, the claims
department of the insurance company starts its process. Together with other assisting staff, the
claims adjuster will be tasked with the duty of looking into the claims made and confirm that the
insurance contractual terms cover the claims made. If covered, the claims adjuster will calculate
a monetary value of the claim made and approve payment. The claims adjuster usually maintains
communication with the policyholder throughout the process. The insured person is also at
liberty to engage the services of a public claims adjuster to negotiate a reasonable amount of
money on his or her behalf.
Some of the importance of claims service includes;

The policyholder is given a chance to enjoy a reasonable amount of

money to compensate for the loss suffered.

In an event of loss or damage of an insured property, claims services

will ensure that the insurance company has been alerted of the same
within the time-frame stipulated.

The policyholder will also get the necessary advice on whether the
claim made is covered or admissible as contained in the insurance
contract.

Claims service is therefore important in ensuring that the insured person gets what is rightfully
deemed appropriate to restore normalcy. In this way, the insured person gets the compensation to
what was lost or damaged.

Process of insurance claim

Motor Insurance
In case an unfortunate loss covered in the policy occurs we request you to take the following
steps to get prompt service
1. Contact the policy issuing Office of United India immediately or if the accident takes place
anywhere other than the City/ Town where policy issuing Office is located contact the nearest
Office of United India so that survey is arranged. List of our Offices with addresses across the
country with Phone Numbers are available in our Company's web site for your ready reference.
Check our web site www.uiic.co.in for list of our Offices across the country
2. In case of major accidents including fire/riot losses keep the vehicle at the accident spot/ site
until the spot surveyor comes to the place of accident and inspects the same. However please
note that spot survey is necessary in case of accident to all commercial vehicles. Please keep the
phone No. of the agent/ policy issuing Office for quick response from our side.
3. Simultaneously if there are any third party injuries/ deaths make sure to inform the nearest
Police Station about the accident and also full details of injuries/ deaths or damage to any Third
Party Property as the case may be. In case you provide treatment to any injured person/s in any
Hospital the name of the hospital and also Doctor's Name who has given the treatment may be
informed to us.
4. After completing the said formalities you may move/ tow the vehicle to any authorized
workshop of your choice and obtain estimate from them and the same may be submitted to us
together with completed claim form (this can be obtained from any of our nearest office) for our
arranging final survey. You may also please submit to the surveyor copy of the complaint lodged
with the police station along with original FIR if immediately available. However in case where
TP injuries are involved FIR is compulsory and the same must be submitted to the office.
5. It should be ensured that under no circumstances repair work is commenced until the final
surveyor verifies the damage and gives green signal to proceed with the repairs
6. After the repairs are carried out for partial loss claims you have to submit the cash bills for
spare parts and labour and seek reimbursement if the claim is admissible.
Fire and Engineering Insurance
In case an unfortunate loss as covered in the policy occurs, so as to get prompt service we
request you to take the following actions:

a. Immediately inform the office concerned over phone and in writing the occurrence of the
claim along with the correct policy number.
b. Obtain the claim form from the office concerned, fill up the same in all respects and submit
the same in our office.
c. n case the loss is very large, prompt intimation is required to send a suitable surveyor to assist
you in minimizing the loss and quick settlement of claim which helps to restart the business
activity. Our officer may also visit the site of loss to have a first hand information of the loss.
d. In order to help to prove your claim the surveyor or office may seek documentary evidence.
You may handover photocopies of necessary documents and obtain acknowledgement.
e. Fully cooperate with the surveyors and insurance officials visiting the site of loss to examine
the cause of loss, to correctly estimate the extent of loss and to work towards a quick settlement
of the loss. They should be helped to take photographs of the loss and obtain statements of
witnesses.
f. Necessary information, as if you are an uninsured, should be given to the local fire station,
police authorities and other Civil authorities as per law and local practice. Copies of their reports
should be obtained and handed over to the surveyor or office.
g. Surveyor may also be given copies of licences, permits and certifications etc. in force to
ensure that the operations are conducted as per law and as per the necessary safety standards.
h. A copy of the survey report may be handed over to you if you so wish for your record so that
you are aware of the assessment made.
i. As soon as the survey report and copies of the document desired by the surveyor / insurer are
complied with by you, you may keep in touch with our office for early disposal of the claim
Health Insurance
FOR CASHLESS FACILITY AVAILABLE ONLY FOR POLICIES SERVICED BY A TPA:
a. Check if the hospital falls under the networked hospitals or not, as cashless is available only
for networked hospitals.
b. For planned hospitalisations, intimations to be sent to the TPAs in advance with details of:
i. Name and address of the hospital,
ii. Name and address of the hospital,
iii. Name and address of the hospital,
iv. Name and address of the hospital,
v. Name and address of the hospital,
c. In case of an emergency hospitalisation, intimation to be sent to the TPA immediately on
admission.

d. On admission, a Pre-Authorisation Request for cashless is to be sent to the TPA by the hospital
duly signed by the insured and Hospital Authorities giving the details of admission, illness,
proposed line of treatment and the estimated expenses.
e. Please furnish clarifications if any required by TPA.
f. On discharge from Hospital, please pay the difference of amount disallowed under the policy
or limited by the sum insured.
g. Pre and post hospitalisation expenses can be claimed separately after treatment. All documents
in original to be submitted within 7 days to TPA, after completion of Post Hospitalisation
treatment.
FOR REIMBURSEMENT CLAIMS: a. Written intimation about hospitalisation to be sent to TPA / our office (if non TPA)
immediately, and within 24 hours of hospitalisation in the case of emergency hospitalisation.
b. Before leaving the hospital, Discharge Summary, Copy of investigation report and other
relevant documents may be obtained from the hospital authorities. All the documents in original
to be submitted to TPA / Office within 7 days from date of discharge.
c. Documents include claim form issued by insurer, discharge summary of hospital, doctor's
certificates and prescriptions, final hospital bills, laboratory and other investigation reports and
bills, pharmacy bills and all related documents.
d. Pre and post hospitalisation expenses can be claimed separately after treatment. All documents
in original to be submitted within 7 days after completion of Post Hospitalisation treatment.
Miscellaneous Insurance:
In case an unfortunate loss as covered in the policy occurs, so as to get prompt service we
request you to take the following actions:
a. Immediately inform the office concerned over phone and in writing the occurrence of the
claim along with the policy number.
b. Obtain the claim form from the office concerned or the office nearest to you and fill up the
same and give an estimate of the loss.
c. In case the loss is very large, prompt intimation is required to send a suitable surveyor to assist
you in minimizing the loss, for quick settlement of claim and to advise you as to how best to
make the claim properly and how to start up activity after the loss.
d. In order to help to prove the claim the surveyor or office may seek documentary evidence. You
may hand over photocopies of necessary documents and obtain acknowledgement.

e. Kindly cooperate with the surveyors and insurance officials visiting the site of loss to examine
the cause of loss, to correctly estimate the extent of loss and to work towards a quick settlement
of the loss. They should be helped to take photographs of the loss and obtain statements of
witnesses.
f. Necessary information as if you are an uninsured should be given to the local fire station,
police authorities and other Civil authorities as per law and local practice. Copies of their reports
should be obtained and handed over to the surveyor or office.
g. In case of any burglary/theft, a police F I R will have to be registered.
h. Surveyor may also be given copies of licences, permits and certifications as are in force to
establish that the operations were conducted as per law and as per the necessary safety standards.
i. A copy of the survey report may be handed over to you if you so wish for your record so that
you are aware of the assessment made.
j. As soon as the survey report and copies of the document desired by the surveyor/Insurer is
complied with by you, you may keep in touch with our office for early disposal of the claim

7.2 CLAIM SETTLEMENT

Payment of claim is the ultimate objective of life insurance and the policyholder has waited for it
for a quite long time and in some cases for the entire life time literally for the payment. It is the
final obligation of the insurer in terms of the insurance contract, as the policyholder has already
carried out his obligation of paying the premium regularly as per the conditions mentioned in
the schedule of the policy document. The policy document also mentions in the schedule the
event or events on the happening of which the insurer shall bepaying a predetermined amount of
money (S.A.).There may be three types of claim in life insurance policies
1. Survival Benefit Claim
2. Maturity Benfit Claim
3. Death Benefit Claim
We shall discuss hereunder the details of each category of claims.
7.2.1 Survival Benefit :
Survival benefit is not payable under all types of plans. It is payable in endowment or money
back plans after a lapse of a fixed period say 4 or 5 years, provided firstly the policy is in
forceand secondly the policyholder is alive. As the insurer sends out premium notices to the
policyholder for payment of due premium, so it sends out intimation also to the policyholder if
and when a survival benefit falls due. The letter of intimation of survival benefit carries with it a
discharge voucher mentioning the amount payable. The policyholder has merely to return the
discharge voucher duly signed along with the policy document. The policy document is
necessary for endorsement to the effect that the survival benefit which was due has been paid.
The survival benefit can take different forms under different types of policies.
7.2.2 Maturity Claim
It is a final payment under the policy as per the terms of the contract. Any insurer is under
obligation to pay the amount on the due date. Therefore the intimation of maturity claim and
discharge voucher are sent in advance with the instruction to return it immediately .If the life
assured dies after the maturity date, but before receiving the claim, there arises a typical problem
as to who is entitled to receive the money. As the policyholder was surviving till the date of

maturity, the nominee is not entitled to receive the claim. The policy under such conditions is
treated as a death claim where the policy does not have a nomination. The insurer in such a case
shall ask for a will or a succession certificate ,before it can get a valid discharge for payment of
this maturity claim .In case the policy has been taken under Married Womens Property Act, the
payment of maturity claim has to be made to the appointed trustees, as the policyholder has
relinquished is right to all the benefits under the policy. It is for this relinquishment of right that
the policy money enjoys a privileged status of being beyond the bounds of creditors etc.If the
maturity claim is demanded within one year, before the maturity it is called a discounted
maturity claim. This amount is much less than the maturity claim.
7.2.3 Death Claim
If the life assured dies during the term of the policy, the death claim arises. If the death has taken
place within the first two years of the commencement of the policy, it is called an early
death claim and if the death has taken after 2 years, it is called a non early death claim.
7.3 CLAIM DOCUMENTS & FORMS AND SETTLEMENTPROCEDURE
We will discuss in this section the insurance documents necessary at the time of the final
payment. The final payment may relate to the maturity or death claim payment.
7.3.1 The documents required for payment of maturity claim :
(i) Age proof, if age is not admitted.
(ii) Original policy document for cancellation.
(iii) In case assignment is executed on a separate paper, that document has to be surrendered.
(iv) Discharge form duly executed.
(v) Indemnity bond in case the policy document is lost or destroyed, duly executed by the
policyholder and a surety of sound financial standing.
7.3.2 The documents required for payment of a death claim.
(i) An intimation of death by the nominee or a near relative.
(ii) Proof of age if not already admitted.

(iii) Proof of death.

(iv) Doctors certificate who attended the deceased during his last illness.
(v) Identity certificate from a reputable person who saw the body of the deceased life assured.
(vi) Certificate of cremation or burial from a reputable person who attended the funeral.
(vii) An employer certificate if any, of the deceased. If the policy has been assigned validly or if
there is a valid nomination in the policy document, no further proof of title to the policy money
is necessary. In other cases, the satisfactory evidence of title to the estate of the deceased is
required from competent court of law. e.g.
(i) A probate of the will, if a will has been executed by the
deceased life assured.
(ii) A succession certificate if no will has been left.
(iii) A certificate from the Administrator General, if the total amount of the estate left does not
exceed Rs. 2,000/-.In case there is a rival claim courts prohibitory order may be required to
prevent the insurer fro
m making the payment to the nominee as mentioned in the policy document.
7.3.3 In case the life assured has disappeared
Under Indian Evidence Act, 1872, Section 108, a person who has disappeared is presumed to be
dead only if he has not been heard of for 7 years by those who would naturally have heard of
him, if he had been alive. The claimant has to produce the decree of the court to the effect that
the assured should be presumed to be dead. The legal heirs are required to keep on paying the
premium payment till such court order is received failing which the policy will be treated as a
paid up policy.
7.3.4 In case the premature death claim
In case of a premature death claim, i.e. a death within two years of the commencement of the
policy, the insurer asks from claimant documents in order to eliminate the possibility of any
suppression of a material fact at the time of submitting the proposal.
(i) Hospital treatment details where the assured was

hospitalized.
(ii) Certified copies of postmortem report
(iii) The police investigation report if death is due to an accident or unnatural cause.
7.4. PROCEDURE OF CLAIM SETTLEMENT
7.4.1 Maturity Benefit
If the policyholder lives through the duration of the policy and becomes eligible to get the
maturity value it is called the settlement of a maturity claim. As the policyholder is alive,
the nomination is of no significance. Age is normally admitted at the stage of the proposal. If it
has not been admitted for some reason, it is necessary to submit the age proof before the payment
of the maturity value. Much before the date of maturity the insurer sends the claim discharge
voucher which has to be returned duly signed and witnessed along with the policy document for
payment of the maturity value.
7.4.2 Death Claim
In case of the death of the policyholder at any time during the duration of the policy, the claim
amount becomes payable to the nominee mentioned in the policy document. The nominee or the
nearest relative shall send an intimation of death of the policyholder to the insurer stating therein
the fact of death, the date of death, cause of death and the place of death along with the policy
number. Insurer deals with the death claim differently on the basis of the duration or the policy. If
the policyholder has died within two years of the commencement of the policy, i.e., acceptance
of risk which may be different from the date of commencement if the policy has been dated back
it is treated as early or premature claim and if the death has occurred after 2 yrs. of
the commencement, it is treated as normal death claim. In a normal death claim, that is if the life
assured has died after two years of the commencement of risk, the insurer, on being intimated
about the death of the policyholder, calls for the age proof, if not earlier admitted, the original
policy
document and proof of death. The proof of death can be a certificate from the under which
cremation has taken place, or other local body like death registry. The claimant generally is
required to fill in a form giving certain routine information about his title to the policy money
and the information relating to death, which is normally called a claimants statement.

7.4.3 Premature claim

It is a premature claim if the death has occurred within two years from the commencement of the
policy or the date of last revival, or medical examination. The insurer takes certain precautions
before making payment under such a premature claim. It wants to satisfy itself that it is a genuine
case i.e., the correct policyholder has died and that the cause of death does not go back to a date
prior to the commencement of the policy. The duration of last illness is of vital importance to
eliminate any fraudulent intention. Last medical attendants certificate, hospital report, burial
certificate, employees leave record, if he was an employee in a reputed firm etc, are the different
records examined and normally a senior officer is deputed by the insurer to make on the spot
investigation, through neighbors, colleagues or doctor of the locality.
As the revival of the policy is a de novo contract of insurance, the insurer would like to verify
whether the statement contained in the declaration of good health given at the time of revival is
correct. If such a statement is proved fraudulent relating to a material fact, the claim, may be
rejected. Life insurance is a contract of utmost good faith and good faith

has to be observed,

not only at the time of the proposal, but also at the time of the revival of the policy whenever it is
done. In case there is a rival claimant to the insurance money, the insurer can get a valid
discharge by paying to the nominee. The rival claimant can approach a court of law which may
order to stop the payment till the case is finally disposed of. However if there is no nomination
under the policy, the insurer shall await a valid title through either a will or a probate as a
letter of administration or a succession certificate. It may take quite sometime to get such
certificate from the court and in the meantime the family may suffer. A good agent therefore
shall ensure that there is a valid nomination or assignment. If there is an assignment, the policy
money is paid to the assignee. If there is a reassignment of the policy, it is necessary
that a fresh nomination is done, as assignment invalidates the existing nomination. However, if
there is a nomination in favor of the insurer for taking any loan, the nomination is
said to be unaffected subject to the claim of the insurer. If the premature death has been due to an
accident, it is necessary to get a police inquiry report in lieu of the attending physician certificate.
Suicide, if it has taken place within one year of the beginning of the risk, exempts the insurer
from the liability of the payment of the claim. The propensity to commit suicide is a moral
hazard and is not expected to continue beyond one year. If the policyholder disappears and he

has not been heard of for 7 years by those who would naturally have heard of him, if he had been
alive, he is presumed dead as per Sec 108 of the IndianEvidence Act, 1872. However, it is
necessary to keep the policy in force during this period by payment of the due premiums on the
due dates.
7.4.4 Claim concession
Normally, a death claim becomes payable so long as the policy is kept in force by payment of
due premium. In other words if
110
the payment of premium is stopped and the grace period expires and if the death occurs
thereafter the policy is treated
as lapsed or paid up depending upon whether the premium has been paid for less than 3 yrs or
3yrs & more. Under a lapsed policy no claim is payable. In case of a paid up policy, only the
paid up value is payable. However, some companies provide certain concessions with regard to
the claim payment, if the policy has run for 3 yrs or more:
1. If the premiums under a policy have been paid for a minimum period of three full years, and
the life assured has died within 6 months from the date of the first unpaid premium insurer pays
the full sum assured instead of the paid up value and only the unpaid premiums for the policy
year are deducted from the claim amount.
2. This concession is extended to a period of twelve months and the full sum assured is paid if
the life assured dies within one year from the due date of the first unpaid premium, provided the
premiums have been paid for a minimum period of 5 years subject to deduction of the unpaid
premiums for the policy year.
7.4.5 Ex Gratia claim
When a policy has not acquired paid up value and claim concession rules are not applicable,
nothing is payable in case of death. However some insurers relax the rules in favor of
the claimant. If the premiums have been paid for more than 2 years and

(a) the death occurs within three months from the first unpaid premium, full sum assured with
bonus, if any, is payable ;
(b) if the death occurs after 3 months, but within 6 months, half the sum assured is paid ;
(c) if the death occurs within one year from first unpaid premium, notional paid up value is paid.
Under the first condition, the unpaid premium with interest for the policy year of death will be
deducted from the claim and no deduction is made in the other two conditions.

7.5 CLAIM SETTLEMENT OPTIONS

Most claims are paid in single lump sum. In case of a small sum assured, this lump sum payment
may become necessary for immediate needs. (However, where the sum assured is large the
amount if paid in instalments would be a valuable aid to the family maintenance). It is surprising
that adequate attention is not paid to this aspect of the settlement options either by the claimant,
or by the agent or the insurer. The settlement options as available are not competitive in interest
rates and therefore most claimants probably would not opt for it. Lump sum payments are most
likely to be spent much faster leaving the family without the benefit of security. The family in the
absence of the breadwinner may not have the foresight and the ability to look to the safety of the
capital, rate of return, liquidity and ease of management of money. Many insurance companies
world over are facilitating the management of the claim by offering a lot of options to the
claimant. Life insurance can be described as the creation of capital and annuities as a method of
distribution of capital. Life insurance companies therefore, can convert this capital into annuity
payments as per the needs of the claimant. An agent would do well to advise the widow in this
regard and help her to purchase a suitable annuity policy with this claim amount so that the
family can look after itself smoothly for quite sometime. Annuities of various types are available,
as has been discussed in the chapter on Life Insurance Products. Lump sum payment, let it be
remembered, does not offer protection against the creditors of the beneficiary, while the payment
through annuity payment does. For beneficiaries, inexperienced in the art of money management
receiving guaranteed payments in installment may be more desirable.
7.6 IRDA REGULATION ON POLICYHOLDERS

PROTECTION
The Insurance Regulatory and Development Authority has issued the Protection of
Policyholders Interests Regulations, 2002. This regulation states the matters to be stated in the
life insurance policy for the protection of policyholders interests. It also lays down the procedure
to be adopted towards the settlement of claim under a life insurance policy.
7.6.1. Claims procedure in respect of a life insurance policy
(i) A life insurance policy shall state the primary documents which are normally required to be
submitted by a claimant in support of a claim.
(ii) A life insurance company, upon receiving a claim, shall process the claim without delay. Any
queries or requirement of additional documents, to the extent possible, shall be raised all at once
and not in a piecemeal manner, within a period of 15 days of the receipt of the claim.
(iii) A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within
30 days from the date of receipt of all relevant papers and clarifications required. However,
where the circumstances of a claim warrant an investigation in the opinion of the insurance
company, it shall initiate and complete such investigation at the earliest. Where in the opinion of
the insurance company the circumstances of a claim warrant an investigation, it shall initiate and
complete such investigation at the earliest, in any case not later than 6 months from the time of
lodging the claim.
(iv) Subject to the provisions of Section 47 of the Act, where a claim is ready for payment but the
payment cannot be made due to any reasons of a proper identification of the payee, the life
insurer shall hold the amount for the benefit of the payee and such an amount shall earn interest
at the rate applicable to a savings bank account with a scheduled bank (effective from 30 days
following the submission of all papers and information).
(v) Where there is a delay on the part of the insurer in processing a claim for a reason other than
the one covered by sub-regulation (4), the life insurance company shall pay interest on the claim
amount at a rate which is 2% above the bank rate prevalent at the beginning of the financial year
in which the claim is reviewed by it.

Insurance Operations Claim Procedures and the Claim

Adjustment Process
Claims adjusting is the process of determining coverage, legal liability, and settling a claim. The
claim function exists to fulfill the insurers promises to its policyholders. Claim adjusting is
integral to establishing an insurers relationship to its policyholders. The reputation of the insurer
in settling claims directly impacts the marketing and retention of policyholder insurance.
Goals of the Claim Function:
(1) Complying with the contractual promises in the policy
Insurer fulfills this promise by providing prompt, fair and equitable service in either paying first
party claims covered under the policy or paying claims on a third party loss against the insured
due to liability
Insurance is marketed not only as a financial mechanism to provide indemnity on covered losses,
but also to ensure peace of mind after a loss has occurred. Were it not for insurance and the claim
settlement process recovery might be slow, inefficient and difficult.
In some cases, having a claim settlement process allows a policyholder to settle a case that might
not easily be resolved due to emotion ----- e.g. plane crashes --- Airlines benefit by having
insurance and the claims adjustment process to settle with loved ones.
(2) Supporting the insurers profit goal and avoid paying for fraudulent claims
An effective claim settlement process should be designed to control costs and assure that covered
losses are fairly reimbursed. Policyholders are entitled to fair claim resolution. However,
overcompensation of claims will raise the cost of insurance and cause better risks to pay more for
their coverage. \
Conversely, unpaid claims that fall under the contract can result in angry policyholders,
litigation, or regulatory sanctions. A reputation of resisting meritorious claims can invalidate the
effectiveness of insurer advertisements
3 Users of Claim Information
Marketing --- needs information about customer satisfaction, in addition, information gathered
from the claims department can be used to fashion new coverages to better meet the needs of
policyholders e.g. insurance provision for power surges

In some cases, premiums may need to be altered at the agency level to account for increased
claims cost.

Claim personnel must inform producers of court rulings that affect the insurers loss exposures or
pricing, such as interpretations of policy exclusions or application of limits.
Underwriting ----a post-evaluation of claims costs can reveal characteristics of loss that an
underwriter may have been able to detect when considering an application for insurance.
Reviewing a claim can uncover operations and activities that if the underwriter had more
thoroughly investigated might have led to either denial of the policy or offering it on a different
basis. A number of similar claims could also alert underwriters to an emerging problem with a
particular class of policies----e.g. several years ago there was a controversy in the auto insurance
industry over the use of after market parts.
Actuarial----require accurate information on the actual claims costs, as well as, up to date
information on claims that have occurred and need to be reserved against settlement later on
[IBNR]
Claim Department Contacts
Public --- Providing information to policyholders about the claims process, demonstrating that
commitment of the insurer to meeting promises to the insureds through a fair settlement process.
Claimants Attorney - In some cases claimants are more likely to hire attorneys leading to
costly litigation --- although it is not necessarily that all claims will be settled with higher
litigation costs [ many cases are settled out of court legal fees are the claimants responsibility]
Litigation of third party claims has become more expensive --- time to get the case into court,
deposition costs, legal research expenses]
Defense Attorneys-The duty to defend under liability policies may cause the insurer to hire
outside defense attorneys. Managing defense expenses is an essential component of managing
over claim costs. Insurers generally hire an attorney from the jurisdiction in which the claim
occurred. The ideal situation is for the insurer to avoid litigation --- a litigated claim might
indicate that some aspect of the claim adjusting process failed to operate properly.
State Regulators monitor insurers activities in the claim settlement process. Regulators
control the licensing of adjusters, investigation of consumer complaints, and performing market
conduct investigations. Ultimately, a regulator also has the authority to suspend an insurer from

being able to operate in its state. Enforcement for claims may be handled through the Unfair
Claims Settlement Practices Act.
Licensing --- not all states currently license adjusters, see Exhibit 8-1, it should be noted that
Iowa does not license independent adjusters, but Minnesota does. Those states that do require
licensing usually have applicants pass a written exam, pay a fee, and secure a fidelity bond.
Some states also license vehicle-damage or property appraisers. Temporary permits or licenses
are frequently granted to out-of-state adjusters that insurers may need to use to adjust claims in
the aftermath of major storm damage.

Consumer Complaints Most states have a specific time limit within which a claim inquiry
must be responded to --- failure to respond can result in fines and event the loss of an adjusters
license.
Market Conduct Investigations regulators periodically investigate claims processes as part of a
normal audit of insurer activities or in response to complaints a typical market conduct
investigation includes looking into claim practices.
Organization of the Claim Settlement Process
Centralized versus Decentralized Claims Settlement
A centralized approach consists of either one home office where all claims are handled or a home
office with a few regional offices. Centralized operations are more efficient that decentralized
operations in terms of cost of rental space, supervisory overhead, MIS, and support staff.
Decentralization can be more costly/difficult to supervise, but allows for adjustment to occur in
person -- because claim tasks can not be done as well from remote locations, claims can never be
completely centralized.
The type of insurance, volume of business, geographic location and density of loss exposures can
determine how an insurer structures its claim operations ---e.g. location of claims office closest
to an area where there is a majority of the cases.
Some insurers organize the claim function by type of insurance or class of business a property
claim dept. handles first party claims, a casualty claim dept. handles third party claims, a marine
dept. handles marine/transportation claims. Responsibility is generally divided amongst
geographic regions.
Claim Function Management and Settlement Authority
Structure and authority varies among insurers ---- VP of Claims is a key member of the
management team. Reporting to the VP of Claims -- one or more assistant VPs responsible for
certain insurance lines.
Claim Managers person below the top executive level has the title of claim manageroften in
charge of both claim files and general administration and supervision of the claim department.
Examiners found in either regional or home offices. An examiner is primarily a claims
specialist who determines coverage, liability, and damage factors; extends settlement authority to
adjusters and recommends settlement amounts or other authorization to superiors up the chain of
the claims process.

Insurer Claim Dept. Structure

VP Claims

Assist. VP Property

Assist. VP Casualty

Property Manager
Examiners

Casualty Manager

Support Staff

Examiners

Support Staff

Regional, Branch or Claim Office Staff

Office Manager
House Counsel

Outside Counsel

Supervisors

Company Adjusters

Independent Adjusters

Supervisors - claims dept. divided into subdivisions by type of coverage or geographic location.
Each unit is under a supervisors direction. The claim supervisor is usually responsible for the
units daily activities --- a supervisor might have certain levels of settlement or denial authority
--- many insurers have a list of approved outside attorneys in localities where losses are most
likely to occur.
Adjusters --- those responsible for investigating, evaluating and negotiating the coverage,
liability and damages related to a claim. An adjuster can be an employee of the insurer, an
employee of an insurer-owned adjustment bureau or an independent adjuster retained either on a
contract basis or on an individual adjustment basis.
Adjusters are usually employed as field adjusters who operate outside the claim office or as
inside adjusters who adjust claims from within the claim office. Field adjusters spend much
of their time visiting the scene of a loss, interviewing witnesses and investigating damages --coordinating loss appraisal.

Inside claim adjusting is appropriate for claims whose expenses are known or for claims that
need little investigation. The level of responsibilities for inside adjusters varies amongst insurers.

Independent Adjusters ---- provide claim adjusting services to a variety of insurers and selfinsurers. Independent adjusting firms derive revenue by charging insurers a fee for claim
settlement services.
National adjusting firms serve not only insurers, but also self-insured corporations [captives] and
government agencies. Many large insurer groups and insurance brokerage groups own their own
independent adjusting firms. Independent adjusters enable an insurer to have comprehensive
coverage of a geographic area without the expense of leasing office space and hiring more
personnel. One disadvantage is that there may be lack of operational control. Sometimes insurers
will hire independent adjusters to handle claims that require specialized knowledge --- asbestos
or pollution claims.
In some fronting arrangements between businesses with high self-insured retentions, the
insured might be instrumental in selecting the independent adjusting firm that will handle claims
on the insurers behalf.
Insurers might also hire independent adjusters when they have been unable to hire permanent
personnel or when they need to supplement staff.
Public Adjusters --- represent policyholders in property claims cases against insurers. They
assist clients in preparing verification of loss, negotiating values to be paid, and preparing
settlement documents.
Producers --- independent agency insurers sometimes permit their producers to handle minor
claims within a specific settlement authority. Most large personal insurers have separated out
their marketing and claim settlement functions.
Other Claim Adjusting Personnel
Insurers rely on special experts to handle unusual or particular claims. Both independent and
staff adjusters tend to specialize in one area of the claim settlement process. One type
catastrophic adjuster who travels to the location of disasters and remains until all claims have
been completed. Another marine or average adjuster who handles freight, cargo, vessels,
aircraft [average in marine insurance is a term used for loss].
Origin and Cause Experts --- attempt to determine where and how a fire began seek to find out
whether a fire loss may be due to arson.
Material Damage Appraisers - inspects the damage, and if it is repairable, estimates the repair
cost. If an item is not repairable or is lost, the appraiser assists the adjuster in determining the

value or replacement cost of the item and in disposing of salvage [for commercial coverages in
the case of Homeowners policy salvage is the responsibility of the homeowner].
Reconstruction Experts, Private Investigators, Accountants, Health and Rehabilitation Experts,
Medical Cost Containment Consultants, Professional Engineers, Support Personnel .

Unbundled Claim Services --- large commercial firms have both the necessary expertise and
desire to retain, rather than insure losses. Even though they have financial resources to insure
losses, they may not have or want to maintain in-house talent to settle their own claims.
Many insurers unbundled their services allowing these business to purchase loss control, data
processing, and/or claim adjusting services separate from insurance coverage.

GUIDELINES ON CLAIMS MANAGEMENT FOR THE INSURANCE INDUSTRY

TO: ALL REINSURANCE COMPANIES
ALL INSURANCE COMPANIES
ALL INSURANCE INTERMEDIARIES RE:
GUIDELINES ON CLAIMS MANAGEMENT FOR THE INSURANCE INDUSTRY These
Guidelines on Claims Management are issued pursuant to Section 3A of the Insurance Act for
observance by insurance companies, reinsurance companies, intermediaries and insurance
service providers. These guidelines aim to enhance efficiency, transparency, disclosure of
information to policyholders during claims processing and increase consumer satisfaction. The
Authority envisages that an efficient claims management process will result in improved service
delivery to the public which will in turn create confidence hence improving the image of the
industry. To this end, the Insurance Regulatory Authority hereby issues these Guidelines on
Claims Management to be effected from 1st July 2012.

SAMMY M. MAKOVE COMMISSIONER OF INSURANCE & CHIEF EXECUTIVE

OFFICER

THE INSURANCE ACT (CAP 487)

CLAIMS MANAGEMENT GUIDELINES
1.0 Authorization

IN EXERCISE of the powers conferred by sections 3A (a), (b) and (g) of the Insurance Act, the
Insurance Regulatory Authority issues the Guidelines set out here below, for observance by
insurance and reinsurance companies in Kenya (herein referred to as the insurers), intermediaries
and service providers licensed under the Act , in order to enhance claims management in the
industry.

2.0 General Introduction

The Insurance Regulatory Authority (herein referred to as the Authority) has a mandate to
formulate and enforce supervisory standards for the conduct of insurance business in Kenya as
well as to protect the interests of policy holders and insurance beneficiaries in any insurance
contract. The insurance industry has been faced with challenges in claims management which
has contributed to poor image of the industry and low penetration of the insurance services. Most
insurance complaints relate to claims management suggesting room for improvement in this area
of client service. The Authority has developed this set of claims management guidelines in order
to enhance efficiency, transparency, disclosure of information to policyholders during the claims
processing, and increase consumer satisfaction. These guidelines are also expected to enhance
compliance with the provisions of Section 203 of the Insurance Act by the industry. The
Authority envisages that an efficient claims management process will result to improved service
delivery to the public which will in turn create confidence hence improving the image of the
industry and eventually lead to a deeper penetration level of insurance service. The Board of
Directors is ultimately accountable and responsible for the performance and conduct of the
Insurer in respect to claims management. Delegating Authority to board committees or
management does not in any way mitigate or dissipate the discharge by the Board of Directors of
its duties and responsibilities. IRA Claims Management Guidelines Page 2

3.0 Definitions
Authority means Insurance Regulatory Authority established under section 3 of the Insurance
Act CAP 487 Laws of Kenya.
Licensee means any person that holds a license from the Authority or any other person where
the approval of the commissioner is required and shall include the insurers, insurance
intermediaries and service providers as licensed by the Authority.
Claimant means a person who has a right to a settlement arising from a contract of insurance.
Complaint means any communication that expresses dissatisfaction about an action or
omission of a service and calls for a remedial action.
Enquiry means any communication from a customer for the primary purpose of seeking
information about a company or services.
Policyholder means the person who for the time being is the legal holder of the policy for
securing the contract with the insurer.
Service Provider means any person appointed to provide a service in facilitating a claim
process.
4.0 Pre-loss information
4.0. The Insurer shall issue the insurance policy and provide instructions on what a claimant
should do when a loss occurs.
4.1. Notwithstanding the generality of clause 4.1, the instructions shall provide information to
the policyholders on the following;
i. Loss minimization.
ii. Reporting of the claim in a timely manner as provided for in the policy. The insured has an
obligation to notify the insurer of the loss as soon as it occurs or as soon as reasonably possible.
It should be emphasized to the insured that prompt reporting of the loss is important for
preserving evidence that may be critical in determining admissibility and quantum of the claim.
IRA Claims Management Guidelines Page 3

iii. The need for policyholders to cooperate in the investigations by providing the company with
all facts & information and in particular official documents regarding the loss.
iv. The need to allow the company to handle inspection and assessment of damage prior to
settlement.
v. The need to understand that they may be required to surrender their rights to the insurer for
recovery after settlement of the claim under the principle of subrogation.
5.0 Loss notification & acknowledgement
5.1 Notification of the claim may be done as per the policy provided that the claimant shall use
any fast means of communication to the insurers designated contact person or department or
through the intermediary by;
(a) Direct reporting
(b) Telephone call
(c) Text message
(d) E-mail
(e) Fax
(f) Letter
(g) Use of social sites or websites
(h) Any other form of technology of wide usage.
Provided that where the mode of communication used lacks written evidence, the insurer shall
inform the claimant of the need to follow up such communication with a letter and/or completion
of the appropriate claim form.
5.2 Where loss notification is received by an insurance intermediary, such notification shall
immediately be transmitted to the insurer, provided that an intermediary who contravenes the
provision of this clause shall be liable for any of the enforcement mechanisms specified in clause
4.3 of the Guidelines on Market Conduct for Intermediaries.

5.3 Upon receipt of claim notification, the insurer shall take the following action immediately but
not later than seven (7) working days;
(a) Acknowledge the notification.
IRA Claims Management Guidelines Page 4

(b) Avail an appropriate claim form and if specific documents are required when filing a claim,
the insurer will provide a list of these documents.
(c) Provide any additional information/advice that will assist in dealing with the claim.
(d) Where applicable contact any other insurer that is involved in the claim within a reasonable
time and resolve inter-insurance claim disputes as quickly as possible.
(e) Appoint a service provider(s) as necessary.
6.0 Receipts of claims by the company
6.1 The insurer upon receipt of all the documents in clause 4.3 (b) shall;
i. Acknowledge receipt of the documents within 7 days. The date of acknowledgement of the full
documentation shall be construed to be the date of reporting of the claim within the meaning of
section 203 (1).
ii. If a claim is admissible and can be settled immediately without any further assessment, the
insurer shall effect the settlement of the claim expeditiously.
iii. If the claim is admissible but further assessment by a service provider is necessary to quantify
the loss, the insurer shall promptly appoint a service provider and advise the claimant or the
intermediary on the action being taken. The insurer shall upon receipt of the assessment report
make an offer to settle the claim.
iv. Where further investigation is necessary to determine admissibility of the loss under the
policy, the insurer shall notify the claimant of this requirement, explain and emphasize to the
claimant the need to co-operate with the investigators. Upon receipt of the investigation report,
the insurer shall within seven days make an offer or communicate declinature and the reasons
thereof.
v. An admission of liability contemplated in section 203(1) shall be construed to mean
performance of an act by an insurer that is consistent with the settlement of the claim and shall
include but not

IRA Claims Management Guidelines Page 5

limited to making of an offer, issue of a discharge voucher, authorizing repair and replacements.
vi. If in the opinion of the insurer the loss is not covered by the insurance policy, the insurer shall
after exhausting their internal mechanisms on declining a claim, immediately send a notification
to the claimant and/or the intermediary explaining the reasons for the declinature.
vii. If the amount offered is different from the amount claimed, the insurer shall explain the
reason for this to the claimant.
viii. Where the insurer is not responsible for any part of the claim, the insurer shall promptly
notify the claimant of this fact and explain the reasons.
6.2 A claim that is reported late should not be repudiated without establishing reasons for the late
notification.
7.0 Claims Handling
7.1. Every insurer shall develop and maintain a manual on their claims handling procedures
which shall include all steps from claim intimation to settlement for different classes of insurance
business. The manual shall provide expected timeframes in each of the steps, provided that the
insurer shall, while setting the time frames take into consideration the provisions of Section 203
of the Insurance Act.
7.2. Every insurer while formulating the manual in clause 7.1 shall put in place clearly defined
control and reporting systems surrounding the claims management process.
7.3. Every Insurer shall file with the Authority the manual in clause 7.1 above. Any changes to
such a manual shall be notified to the Authority before implementation.
7.4. The insurer shall inform the claimants about their procedures, formalities and common time
frames for claims settlement.

IRA Claims Management Guidelines Page 6

7.5. The insurer shall give information about the status of the claim to the claimant or the
intermediary in a timely and fair manner.
7.6. The insurer shall explain to the claimant in simple language claim conditions such as
depreciation, average, pre-loss value, reinstatement, excess/deductibles among others.
7.7. Where an assessment of a claim has been carried out, a copy of the assessment report shall
be made available to the claimant upon request.
7.8. Every insurer upon recovering through subrogation shall promptly refund the excess or
deductible to the insured. The insurer shall set the procedures for recoveries in the manual under
clause 7.1.
7.9. An insurer shall develop procedure for declining claims, provided that such procedures shall
ensure reasonableness in the decision to decline.
7.10. An insurer shall not decline a claim on the grounds of:(a) non-disclosure of material facts which a policyholder will not reasonably be expected to have
known.
(b) misrepresentation unless it is fraudulent or negligent misrepresentation of material facts.
(c) breach of warranty or condition where the circumstances of the loss are unconnected with the
breach.
(d) late reporting without establishing and considering the reasons for the late notification.
(e) expiry of a driving license at the time of the accident provided that the driver was not
disqualified from holding such a license at the time of the accident and has not contravened the
requirements of the Traffic Act CAP 403 as far as validity of the driving license applies.
7.11. Every insurer shall maintain competent staff with appropriate skills in claims handling.

7.12. Every Insurer shall carry out regular internal audit of all claims lodged with them. Internal
audit shall apply to all stages of the claims management process.
IRA Claims Management Guidelines Page 7

8.0 Fraud detection and prevention

8.1. In order to curb the growth of fraudulent claims, every insurer shall take the following steps;
(a) Establish systems and controls for detecting and identifying fraud appropriate to their
exposures and vulnerability.
(b) Discourage fraudulent practices by making the claimant aware of the consequences of
submitting false statements in the claims filing phase. To this end the insurer may place a
notification on their claim forms referring to the consequences of lodging fraudulent claims.
(c) Establish a database where claims suspected to be fraudulent would be reported.
(d) The staff handling claims shall be trained to scrutinize claim documents in order detect
falsehood and possible fraud.
8.2. Where in the opinion of the insurer any claim lodged is fraudulent the insurer shall;
(a) Apply and exhaust its internal mechanisms for detecting, identifying and verifying the fraud.
(b) Where necessary report the matter to the Insurance Fraud investigation Unit (IFIU).
(c) Provide relevant evidence that forms the basis of suspicion that a claim is fraudulent.
(d) Not disclose or perform anything that is likely to prejudice the criminal investigations and
prosecution of the suspects.
9.0 Specific issues affecting Motor Claims
9.1 Valuation of motor vehicles at inception of cover.
In order to minimize complaints in respect of pre-accident values of motor vehicles after a loss,
valuations of insured vehicles shall be carried out at inception and/or renewal of cover.
9.2. Contribution for Motor Vehicle repairs.
An insured will only be called upon to contribute towards repairs where:
(a) Components in the vehicle are subject to continuous wear and tear. Such components include
but are not limited to;
IRA Claims Management Guidelines Page 8

(i) Tyres and tubes

(iii) Batteries
(iv) Engine overhaul parts
(v) Gear box, transmission and transfer cases.
(b) The vehicle requires rebranding after repairs.
(c) The repair requires a set of similar items to be replaced whilst only one of the items was
damaged in the accident.
9.3. Repair for accident vehicles.
9.3.1. Accident vehicles will be repaired by a repairer of the insureds choice selected from the
insurers panel of repairers, provided that where the insured chooses one outside the panel, the
insurer shall ascertain that the repairer is competent to carry out such repairs and has complied
with all statutory requirements to carry out such business.
9.3.2. It will be a requirement that such a repairer shall be a registered member of a body or
association recognized by the Authority.
9.3.3. A copy of assessment report referred to in clause 7.7 containing a list of parts to be
repaired and replaced shall be made available to the claimant.
9.3.4. Upon receipt of the assessment report and establishing that a vehicle is repairable, the
insurer shall authorize repairers to commence on the vehicle without delay.
9.3.5. The claimant shall be informed by the insurer about the coverage for towing and storage
services and the extent of coverage if any, for a replacement rental vehicle while the damaged
one is under repair.
9.4. Write-off

A motor vehicle will be considered a write-off when the repair estimate expressed as a
percentage of the pre-accident value as contained on the assessment report exceeds an
economical level. The insurer shall accord the claimant the opportunity to contest the basis of
valuation leading to the write-off. IRA Claims Management Guidelines Page 9

9.5. Disposal of salvages

9.5.1. Where the vehicle is a write-off but repairable, the insured shall be accorded an
opportunity to retain the salvage or forfeit the salvage to the insurer and be indemnified on the
basis of the pre-accident value established in the assessment report.
9.5.2. No insurer shall dispose of salvage before the insured is indemnified.
9.5.3. Where the insured chooses to retain the damaged/written-off vehicle, the insurer after
determining salvage value may deduct the amount from the settlement amount based on the
assessment report.
9.6. Duty Free Vehicles
9.6.1. Market value basis
Where a duty free vehicle is insured at market value there will be no contribution for repairs
provided in case of write off or theft, the insured shall be required to clear with the Kenya
Revenue Authority before compensation. Where the insured wishes to keep the salvage, its value
will be determined on a market value and this may be deducted from the total loss amount.
9.6.2. Duty free basis
Where a vehicle is insured on duty free basis, liability of the insurer for repairs will be limited to
the proportion that the duty free value of the vehicle bears to its market value. In case of a write
off, the insured will be indemnified on duty free basis and will retain the salvage. Where the
vehicle is lost and not recovered, settlement will be on the duty free basis. The insured will clear
with the Kenya Revenue Authority to obtain a transferable document to submit to the insurer for
the claim to be settled. IRA Claims Management Guidelines Page 10

10.0 Customer care Desk

10.1 Every insurer will establish a customer service desk where queries and complaints will be
lodged and resolved.
10.2 To maximize customer satisfaction, the desk will be used to lodge, route enquiries and
complaints. The desk shall be equipped with competent officers with skills in complaints
handling.
10.3 Every insurer shall have a documented system and procedure for receiving, registering and
disposing of complaints in each of its offices. This will include a system to receive and deal with
all kinds complaints lodged with them.
10.4 Every insurer shall have in place details of Turn Around Times (TAT) for complaints
resolution which shall be set out in the manual of procedures under clause 7.1. These will include
but not limited to;
i. Acknowledgement of complaints.
ii. Provision to the complainant with explanations on how their complaint will be handled and
the procedures to be followed.
iii. Provision of information on internal and external complaints settlement procedures.
iv. Processing of complaints promptly and fairly.
v. Updating the complainant regularly on the progress of the claim.
vi. Provision of a final response in writing within a reasonable period of time.
vii. If complainant is dissatisfied with the final response sent by the insurer, provision of advice
on the external complaint settlement procedures available, including reporting to the Authority.
10.5 A complaint will be considered as disposed off and closed when;
i. The company has acceded to the request of the complainant fully.
ii. Where all parties to the complaint have been satisfied and the matter marked as closed.
IRA Claims Management Guidelines Page 11

11.0 Submission of Returns

Every Insurer shall file with the Authority monthly and annual returns in a prescribed form as
provided under section 203 as read together with Principal Regulation 48 of the Insurance Act.
12.0 Enforcement of the Guidelines
12.1. The Insurance Regulatory Authority shall enforce these guidelines against the insurance
companies, reinsurance companies, insurance intermediaries and insurance service providers.
12.2. The Authority shall enforce compliance to these guidelines by exercising its powers to any
person who contravenes the guidelines or take any other measure as prescribed in the Insurance
Act.