Repudiation letter: language defects, rewrite and the risk of citing the regulator
Sunrise General Insurance's Grievance Redressal Cell must reply within seven days to Mr Ramesh Iyer, whose ₹2,84,600 hospitalisation claim was repudiated. The draft prepared by a trainee reads:
'Dear Sir, We are regret to inform you that your claim has been repudiated on the grounds that you have suppressed material facts regarding your diabetes since 2019, which you were suffering from. As per IRDAI rules no claim is payable in such cases. Your policy is cancelled with immediate effect and the company is not liable to pay any amount whatsoever in future also. Kindly note that the decision is final and no further correspondence will be entertained.'
The file shows the policy was issued in March 2022 through a tele-caller who recorded 'no diabetes'; the discharge summary notes diabetes diagnosed in 2021 and controlled by tablets; the policy has completed 24 months. The Claims Head wants the letter to state facts, avoid admissions of liability, and tell the insured what he can do next.
1. Identify four specific language or communication defects in the draft, quoting the faulty phrase and giving a one-line reason for each.
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1. "We are regret to inform you" - grammatical error (a verb after 'are' is used as a noun). Correct form: 'We regret to inform you.' A basic error in a repudiation letter immediately undermines the insurer's credibility with the insured, the ombudsman and the consumer forum.
2. "regarding your diabetes since 2019, which you were suffering from" - the clause is redundant and syntactically tangled; 'which' has no clear antecedent and the date is not supported by the file (diagnosis is 2021). The sentence should state one verifiable fact: what was asked, what was answered, what the record shows.
3. "As per IRDAI rules no claim is payable" - a vague appeal to an unnamed rule. The actual ground is the policy's disclosure condition read with Section 45 of the Insurance Act, 1938, not an IRDAI direction. The sentence is both imprecise and potentially untrue.
4. "Your policy is cancelled with immediate effect and the company is not liable to pay any amount whatsoever in future also" - conflates repudiation of one claim with cancellation of the contract, and is ungrammatical. The insured will read it as forfeiture of all future benefits, which is not what the file supports.
5. "the decision is final and no further correspondence will be entertained" - denies the insured the grievance-redressal route he is entitled to use, and reads as a refusal to engage rather than a reasoned decision.
2. Rewrite the operative paragraph (from 'We are regret' to 'entertained') in 80–100 words in plain, courteous English: factual, no admission of liability, and telling the insured what he can do next.
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Rewritten text (94 words):
Dear Mr Iyer, We have examined your claim of ₹2,84,600 under policy no. XXXX. Our records show that at the time of proposal you stated that you were not suffering from diabetes, whereas the discharge summary records a diagnosis of diabetes in 2021, before the policy was issued. Because this information was material to our decision to issue the policy, we are unable to admit the claim. We regret this outcome. If you believe our records are incorrect, please write to us within 15 days with supporting documents, or approach our Grievance Redressal Officer.
Why it works: it separates the three things the trainee merged - what the insured declared, what the hospital record shows, and the consequence - so the reasoning is visible and can be tested by the reader. It carries no admission of liability, drops the false regulatory reference and the threat, and replaces 'no further correspondence' with a concrete 15-day window and two escalation routes. The tone is formal without being cold; 'we regret this outcome' acknowledges the human situation without conceding the decision.
3. The trainee argues that writing 'as per IRDAI rules' makes the letter authoritative and discourages escalation. Assess that reasoning.
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The premise is backwards: borrowed authority that cannot be substantiated converts a routine grievance into a regulatory and consumer-forum exposure.
First, accuracy. IRDAI does not, by rule, bar every claim where a pre-existing condition was not disclosed. The insurer's right flows from the proposal's declaration and the policy condition on material facts, read with Section 45 of the Insurance Act, 1938. Because the policy here is 26 months old, it is still within the three-year window in which the policy can be questioned on grounds of fraud or misrepresentation of a material fact - so the correct ground exists and should be stated plainly. After three years the same letter would be legally wrong as well as badly worded.
Second, consequence. A consumer forum or the insurance ombudsman examining 'as per IRDAI rules' will ask which rule. When none is produced, the insurer looks evasive on the one point that matters, and the rest of the letter loses credibility too. The insured may also complain to IRDAI about misrepresentation in a customer communication.
Third, effectiveness. Letters that cite the actual clause and the actual document ('your proposal dated 4 March 2022; the discharge summary of 12 May 2024') are far harder to challenge than letters that cite a nameless authority. Authority should come from the policy wording and the record, not from the regulator's name used as a rhetorical device.