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LIC moves to control fake claims

LIC moves to control fake claims

Apnainsurance.com Research Bureau

14 Jul 2008

Life Insurance Corporation of India (LIC) is bringing in stringent norms for suspect agents with records of consistent early claims. It is an attempt to arrest fake and early claims i.e. arising after the first year of a policy.

The insurance major has set up a directory of 'watch-listed agents' consisting 1,767 agents. This directory will track the records of agents with high incidences of early claims. Any time one of these listed agents register a new business proposal the company will be alerted saying that the agent has a history of adverse early claims experience.

Furthermore, to better understand early claims patterns and leakage sources, the company has carried out a number of analytical exercises at all levels. Underwriting rules for watch-listed agents have been made more stringent. Their proposals will only be registered after a 100% implementation of Know Your Customer (KYC) norms. These agents will also not be able to procure business under the non-medical (general) category; they will be restricted to just the medical and non-medical (special) categories. If an agent wants to register a non-medical (special) proposal, he/she will have to procure a signed certificate from the employer of the prospective policy buyer and attach it to the prospective customer's records of leave taken on medical grounds in the last five years.

In addition, irrespective of sum assured, third party administrators (TPAs) will conduct medical examinations.