[lg policy] India: Mind your language, regulator tells insurers as plaints rise

Harold Schiffman hfsclpp at GMAIL.COM
Sat Apr 14 14:54:18 UTC 2012

Mind your language, regulator tells insurers as plaints rise
Published: Friday, Apr 13, 2012, 9:12 IST
By KV Ramana | Place: Hyderabad | Agency: DNA

Health insurance may form a small slice of the non-life insurance
sector, yet it accounts for a third of consumer complaints.
The Insurance Regulatory and Development Authority (Irda) believes
lack of clarity in policy documents is the root cause of this.

“If one-third of complaints are from the health side, I will conclude
that the nature of communication on health insurance policies and the
understanding of the policy by the consumer are areas of concern.
Probably, the lack of clarity is reflected in the increasing number of
complaints,” said J Hari Narayan, chairman, Irda. There were as many
as 92,898 complaints from the non-life sector till date of which
34,819 were from health insurance policy holders, as per Irda data.

An insurance policy, as a contingent contract, has to be specific and
unambiguous. Among other things, the Contract Act, 1872, talks about
consensus between parties of a given contract and is categorical that
the understanding of the terms needs to be balanced. Hari Narayan
minced no words when he said the language used in policy documents is
proving to be a headache.

“We need to think what is going wrong with our communication. We
should look at the question of language… whether the usage of a local
language will help, or the nature of the language, including its
construction, needs to be changed.” He pointed to rigorous legal
documentation that are enforceable by law. Even in England, they have
changed the structure of the language. What we use here has little
resemblance to the language used in the UK.”

But Hari Narayan admitted regulation of language or wordings in policy
documents can create complications despite tariff structures being
denotified. “There is some merit in this concern expressed by the
industry, but it’s not the whole truth. Wordings can be changed. While
we are concerned about the changes, I don’t want more and more complex
words to be used,” he said. He emphasised the onus lay with the sender
and not the receiver of the communication as far as policies go. “If
the policy holder is not able to understand something in the policy,
it is the fault of the insurer and needs to be addressed. Or it lies
with the hospital or with the third-party administrators,” he said.


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