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Pankaj Tyagi
| Updated: 10 Aug, 2021 | Category: Insurance Company

Insurance Ombudsman: Resolve Insurance-Related Disputes with Ease

Insurance Ombudsman: Resolve Insurance-Related Disputes with Ease
Reading Time: 4 minutes

The Indian Government introduced the Insurance Ombudsman scheme for the Individual policyholders to resolve their grievances without judicial proceeding cost-effectively and impartially. Presently, there are 17 Insurance ombudsmen located pan India. These institutions allow the complainant to file their grievance against the accused company. Please note that these institutions work in a state-wise manner. Therefore, the complainant is required to register a grievance in their respective territorial jurisdiction. The complainant has the liberty to file the grievance either by himself or his legal heirs, nominee or assignee.

What Is an Ombudsman?

An Ombudsman refers to a government agent who looks into the complaints posted by the citizens against financial avenues, insurance companies, and other governmental departments and strives to resolve the matters or disputes raised, either by mediation or making recommendations. Unlike lawyers, ombudsmen excel on impartiality- except in scenarios where they support the rights of others.  Another thing that makes them distinct from lawyers is that they lack the right to render legal advice.

Insurance Ombudsman, as the name suggests, deals with insurance-related disputes and endeavour to resolve them through impartial recommendation. They also play a key role in negating the possibility of judicial trial, which is a time-consuming and costlier affair for the end-users.

Read our article:How to Establish Insurance Brokerage Company in India?

KEY TAKEAWAYS

  • The ombudsman plays a critical role in fostering a healthy relationship between end-users and service providers.
  • Owing to in-depth knowledge and experience, the ombudsman has the ability to figure out a viable solution for an ongoing dispute between end-user and service provider.
  • Depending on the jurisdiction, the decision offered by the ombudsman may or may not be legally binding. However, any recommendation made by then has considerable weight.
  • The processing time for a grievance varies in accordance with the type and complexity of the complaint.

Complainant can visit Insurance Ombudsman in case;

  • The insurance company has refused to address your complaint
  • The insurance company fails to render an appropriate solution for your problem
  • The insurance company fails to address the concern within 30 days
  • The total valuation of the claim, including expenses, is not higher than Rs 30 lakhs

Nature of complaints addressed by Insurance Ombudsman

  • A late response of the insurance company to the claim settlement request
  • Insurance companies (be it Health insurers or Life insurers, General insurers) refused to entertain the claim, either partial or complete.  
  • Any contradiction related to the premium paid or payable relating to the insurance policy. 
  • Inclusion of falsified or misleading information in the policy
  •  
  • Illicit or impartial code of conduct of the insurers or their agents in the purview of the policy
  • The terms and conditions of the policy deviate from the terms proposed in the proposal form submitted by the proposer. 
  • The insurer fails to facilitate the insurance policy to the policyholder even after receiving the premium for the same.

The insurer fails to comply with;

Nature of complaints addressed by Insurance Ombudsman

An overview of the settlement process 

Here’s how a settlement process initiated by Insurance Ombudsman goes in general

Recommendation offered by the Insurance Ombudsman

Insurance ombudsman will act on the behalf of complainant and

  • Arrive at the impartial recommendation depending on the fact of the dispute. 
  • If you accept this as a final settlement, the Insurance Ombudsman will inform the same to the company, which would be liable to comply with the terms within 15 days. 

Passing of Award

On the contrary, if the complainant refused to accept the recommendation, then Ombudsman will:

Pass an award within three-month timeline after receiving all the requirements from the victim and which will be binding on the insurer.

Insurer complying with award

The insurance company shall comply with the award within 30 days timeline after receiving the award and share the compliance with the Insurance ombudsman.

What is the Procedure to register a complaint?

If your insurer has defrauded you;

  • Visit the Grievance Redressal Officer located in your territorial jurisdiction  
  • Register your complaint in written and attested the same with supporting documents 
  • Do not forget to obtain the written acknowledgement of your complaint

The insurance company should act swiftly and strive to resolve the concern on the prompt basis.

In case your complaint remains unresolved within the said timeline, or you receive an unsatisfactory response then you can connect to the Grievance Redressal Cell of the Consumer Affairs Department of IRDAI via the following contact details;

Call Toll-Free Number 155255 (or) 1800 4254 732 or

Send an e-mail to [email protected]

  • You can also head over to Integrated Grievance Management System (IGMS), an IRDAI-backed portal to Register and monitor your complaint. 
  • Send a hard copy of the written complaint to IRDAI via a standard form that can be downloaded from the IRDAI website. After filling the said form with legit details, send the same and annexure, if necessary, via post or courier to the following address.

General Manager

Consumer Affairs Department- Grievance Redressal Cell,

Insurance Regulatory and Development Authority of India (IRDAI),

Sy.No.115/1,Financial District, Nanakramguda,

Gachibowli, Hyderabad-500032 

  • If your insurer fails to remedify your complaint as per your expectation, then you approach IRDAI. The said authority will take care of your matter by facilitating the re-scrutiny of the complaint. 
  • If your grievance falls under the ambit of the Insurance Ombudsman, in view of the Insurance Ombudsman Rules, 2017, then you have the right to address your complaint before the Insurance Ombudsman[1] located in the respective jurisdiction. 
  • Leverage legal proceeding in case the dispute seeks enquiry or adjudication, 

Conclusion

An insurance ombudsman mitigates the requirement of involving with tedious judicial procedure. Further, it helps save costs incurred in paperwork and professional fees, which is prominent with judicial proceedings. Thus, it can be concluded that resolving the dispute via insurance ombudsman is indeed a cost-effective and smart approach.

Read our article:An Overview of Insurance Broking opportunities and Critical Aspects

Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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