The Insurance Regulatory and Development Authority of India (IRDAI) has found major problems in the way Star Health and Allied Insurance handles its claim settlements, according to a report by CNBC-TV18. Although the official investigation is not over yet, it is believed that IRDAI may take action against the insurer. Besides Star Health, the regulator has also examined the claim processes of 8 to 10 other health and general insurers in India. However, there has been no confirmation of any action against these other companies so far.
What IRDAI Investigated
IRDAI’s investigation focused on several important aspects related to how claims are handled. This included:
- The number of claims that were accepted or rejected by the insurer.
- The types of deductions applied to claims.
- The queries raised by policyholders about their claims.
Star Health’s Official Response
In response to the media reports, Star Health issued a statement saying that they have not yet received any formal communication from IRDAI about this investigation. The company assured customers and stakeholders that they follow a customer-first approach and comply with IRDAI’s regulations.
Star Health further explained that IRDAI conducts regular audits and inspections as part of its standard regulatory process. These inspections are routine and are designed to ensure that insurance companies operate within the industry’s rules. The insurer claimed that the media reports were speculative and had no basis, as they had not been officially contacted by the regulator.
Key Statistics on Star Health’s Claim Settlements
The IRDAI’s Handbook of Insurance Statistics for 2023-24 provides detailed data about how Star Health handled its claims and premiums:
- Incurred Claim Ratio: Star Health’s incurred claim ratio for 2023-24 was 66.47%. This ratio measures how much of the premiums collected by the insurer were paid out as claims. For every ₹100 collected, Star Health paid ₹67 in claims.
- Comparison with Other Insurers: The average incurred claim ratio for all stand-alone health insurers in 2023-24 was 63.63%. However, when looking at both health and general insurers combined, the ratio was higher, at 82.52%.
Claim Settlement Speed
During 2023-24, Star Health had the lowest ratio of settling claims within 3 months among stand-alone health insurers, with a settlement rate of 82.31%. Here’s how Star Health performed when it came to settlement timelines:
- 82.31% of claims were settled within 3 months.
- 2.74% were settled within 3 to 6 months.
- 0.35% took between 6 months and 1 year.
- 0.074% took more than 1 year but less than 2 years.
- 0.03% of claims took over 2 years to settle.
Rejected Claims
Star Health rejected a large number of claims during 2023-24. According to IRDAI’s statistics, the insurer repudiated 2,96,356 claims during the year. This is much higher than other insurers, such as:
- Care Health Insurance, which rejected 76,903 claims.
- Aditya Birla Health Insurance, which rejected 57,414 claims.
- Niva Bupa Health Insurance, with 55,185 rejected claims.
- ManipalCigna Health Insurance, with 50,480 rejected claims.
Policyholder Grievances and Complaints
Star Health also recorded the highest number of policyholder grievances at the beginning of the financial year (797 complaints), second only to National Insurance Co. Ltd., which had 1,638 grievances.
Additionally, Star Health received the highest number of new complaints during 2023-24, with 16,804 complaints filed against it. Of these, 16,603 were verified as actual complaints. In comparison, United India Insurance Co. Ltd. was the second highest, with 7,181 complaints.
What This Means for Policyholders
If you are a policyholder with Star Health Insurance, it’s important to stay informed about this ongoing situation. The large number of rejected claims and complaints could be a red flag, although the company has assured customers that they are committed to improving their processes.
Final Thoughts
IRDAI’s inspections and audits aim to protect policyholders by ensuring that insurers follow fair and transparent practices. While Star Health is under scrutiny, it’s a reminder for all policyholders to carefully review their insurance policies, understand the terms and conditions, and keep track of any developments affecting their insurer.
