Insurers of flight MH370's passengers have no precedent for policy payouts
The unprecedented nature of Malaysia Airlines flight 370's disappearance means it is up to the discretion of the passengers' insurers whether or when they make payouts to their families.
However, the high profile of the case and a notice from the China Insurance Regulatory Commission (CIRC) to all mainland insurers to fast-track compensation has prompted many insurers to consider showing flexibility and signing off on the cheques soon, according to several insurance executives.
"While insurers usually only pay families when the airlines confirm a crash has happened, the missing Malaysia Airlines flight is unique, as there was no wreckage or any bodies found," said Peter Tam Chung-ho, chief executive of the Hong Kong Federation of Insurers (HKFI), the industry body in the city.
Most other plane crashes have pictures of wreckage so insurers need no proof a crash has happened. Even in the case of the Air France Flight 447 in 2009, rescuers found two bodies after the flight had been missing five days, which led insurers to take immediate action.
Tam said the HKFI would not issue guidelines to insurers on what to do next so it would be up to individual insurers to decide whether or not to pay out on policies even without concrete proof of a crash.
On the mainland, the CIRC has been more decisive. On Sunday, the regulator issued an urgent notice requiring all mainland insurers to offer quick assistance and compensation to families of policyholders.
http://www.scmp.com/news/asia/article/1448973/insurers-flight-mh370s-passengers-have-no-precedent-policy-payouts