New Policyholder Protection Claims Rejection Rule From 1 January 2011

The amended Policyholder Protection Rules promulgated under section 55(5) of the Short-term Insurance Act, 1998 and section 62(5) of the Long-term Insurance Act, 1998 published on 17 December 2010 come into operation on 1 January 2011. The rules which were initially scheduled to be implemented on 1 Janaury 2010 are a variation of the existing short-term Rule 7.4 (and the corresponding long-term Rule 16.1 and 16.2) regulating an insurer's decision to reject or accept claims as well as time limitation provisions for the institution of legal claims. The time periods provided for from date of publication to date of operation are limited and insurers need to immediately put in place systems in order to ensure compliance with the amended rules.

In terms of the new rules, the claims handling procedure from 1 January 2011, is:

Insurers must decide whether they accept, reject, or dispute the quantum of the claim "within a...