The Hindu : National : Flood cover not being withdrawn: IRDA

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Friday, Aug 05, 2005

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Flood cover not being withdrawn: IRDA

Special Correspondent

Norms eased for policyholders in two States

NEW DELHI: In an obvious assurance to the flood-ravaged in Maharashtra and Gujarat, the Insurance Regulatory and Development Authority (IRDA) on Thursday announced that there was no move on the part of public and private general insurance companies to withdraw the flood cover for homes and commercial establishments.

In a statement, IRDA Chairman C.S. Rao said: "Neither the IRDA nor the insurance companies are contemplating withdrawal of the flood cover, as part of `Standard Fire and Special Perils Policy', for homes and commercial establishments."

The assurance has come in the wake of reports that insurance companies were contemplating withdrawal of the cover following the massive damage caused by rains and floods in the two States.

Mr. Rao also denied that IRDA member P.A. Balasubramaniam had said that insurance officials had suggested withdrawal of the policy cover against floods.

On the contrary, to facilitate expeditious settlement of claims totalling about Rs. 1,500 crores, the IRDA has eased certain norms for policyholders in Gujarat and Maharashtra.

This includes relief measures such as raising the slab structure of losses that renders assessment mandatory. For the purpose of settling claims speedily, the mandatory loss assessment limit has been raised from Rs. 20,000 to Rs. 50,000, Mr. Rao said.

Moreover, insurers have also been given the freedom to utilise their in-house surveyors for assessing losses amounting to Rs. 50,000. This provision, however, has been made available for the next two months only. "This special dispensation is given to insurers to ensure expeditious disposal of claims and for mitigating the hardships to policyholders," he said.

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