GREAT STRIDES MADE IN INSURANCE, BUT THERE IS STILL A LONG WAY TO GO

Two decades ago when I joined the insurance industry, it had just about been privatized. "But will they pay a claim?" everyone asked me about the sector.

- KAPIL MEHTA

My guess is that, in the private sector, fewer than 1,000 death claims had been paid until then. So, disguising my under-confidence, I reassured others. That reassurance was not misplaced. Today, over 1 million death claims are paid each year. If I include health and other claims, the numbers are much larger. Over the years, there have been many changes that have made this possible.

The best development, in my view, has been introduction of regulation to safeguard policyholder interest. Today, insurers cannot deny a life claim after three years and a health claim after eight years of buying an insurance policy; health insurance products are renewable as long as you live, irrespective of claims you make; premiums cannot be changed based on your claim history; key definitions such as pre-existing health conditions are standardized and reasonable; life insurance illustrations must fall between a sensible 4% and 8% and be signed by you; charges in ULIPS (unit-linked insurance policies) are capped and, no exclusions are allowed in life insurance, except suicide, in the first policy year. These steps, taken gradually over the years, have contributed to such high claim payments.