KEEPING INSURANCE HUMAN
back arrow Back

Insurance exam Question

reply Share
21 Oct, 2021 by  zaara sheikh

Hi . I am studying insurance. I have 2 questions. Can someone please reply ? It's about general Insurance CII

1. A claim was settled by an insurance company but after paying the claim the insurance company came to know that the policyholder got that claim fraudulently. In this case what action will the insurance company take or is it too late to do anything as the claim is already paid?

2. A broker collected premiums from policyholder but didn't pay them to the insurance company and now the broker is in debt and liquidated. In this case what will happen to the policyholder? Will the insurance company give discount on premium to the policyholder or will cancel the policy or will the policy still be in force?and what action will the company take against the broker?

like like
0
Claim
Opinion

2 Answer

Post
23 Oct, 2021

Dear Zarra

Very interesting questions , my views

1. Though Insurance company do all due diligence before accepting a claim but some times wrong claim can be paid . In such cases , insurance companies first would like to ignore as acceptance would give bsd publicity . If amount is large then company has the option to file a civil case and demand recovery . But in 90 % cases , company would like to ignore .

2. Please note that broker and agents are appointrd for generation of new business and retention of clients is insurer responsibility . Insurance contract is between insurers and insured and brokers are not part of any contract . Hence it is the duty of insured to ensure that policy is active and premiums are paid . They can not blame insurer for ommissions of brokers .

However , insured can and should write to grievance department for consideration. Most of insurance company would reinstate policy if any documentary evidence is given .


Hope this clarifies


Shailesh@insurancesamadhan.com



like like
0
icon-comment 1 Comments
icon-reply Reply
23 Oct, 2021
zaara sheikh
like like
0
icon-reply Reply
24 Oct, 2021

Hi Zaara,


1)As rightly said by Shaileshji, insurer will have the option of taking legal recourse and ideally, they should take action but it may again depend on the quantum. 


2) I don't think insurer will be able to help the client in any manner. As per section 64 VB of insurance Act 1938, no risk is assumed before collection of premium by insurer. It is for the client to make sure that premium is deposited directly in insurer account. On a practical note, nowadays, no broker collects the premium on behalf of insurer but it is directly deposited in insurer account.


Legally, there may be some way out for insured if he established that the premium was paid. Chances are slim though in case of Intermediary being a broker. Insured may have a strong case in case it is agent who has collected and defaulted on the premium. Point of difference, Broker is not representing any insurer(they represent Insured) whereas Agents represents Insurer.

like like
0
icon-comment 1 Comments
icon-reply Reply
24 Oct, 2021
zaara sheikh
like like
0
icon-reply Reply
Discover the best tips for insurance every week!

Beshak is not regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and does not have any alliance or association with any Insurance business.
© Copyright 2021 Beshak Solutions Pvt. Ltd. All Rights Reserved.

Disclaimer: The content on the website is purely for information purposes for the public at large, and does not constitute personal financial advice for a specific individual reader.
If you are reading this, it means you love reading the fine print. Why not get paid for what you love doing - Join us by writing to info@beshak.org now 🙂