The Insurance Ombudsman was created due to a notification dated November 11, 1998, by the Indian Government. The purpose behind setting up an institution like Insurance Ombudsman was to address and solve the complaints in an impartial way. Ombudsman is of immense relevance and great importance as it safeguards the interests of policy holders. It also helps in building the confidence and mitigates the problem with trust. It has helped in generating and bolstering confidence and faith amongst the insurers and the consumers.
There are 17 Insurance Ombudsman at present in different locations. The different centers have been allotted different geographical area of jurisdiction. However, all of them have been established with the same motive to aid and protect the interests of policy holders.
The process of complaint redressing is governed by the IRDA Protection of Policyholders’ Interests (PPHI). It has brought the entire redressing framework into focus. As a policyholder, it is good to understand and know how the grievance atonement system works.
Types of complaints entertained
The following complaints are entertained by Insurance Ombudsman:
- Repudiation of claims totally or partially
- Disputes regarding premiums (paid or payable)
- Delay in settlement of claims
- Any dispute on the legal construction of the policies in so far as such disputes relate to claims
- Non-issue of insurance documents
Pre-requisite conditions for lodging a complaint
The following are the pre-requisite conditions for lodging a complaint:
- Complaint must be by an individual on a “personal lines” insurance and within the terms of reference of the Insurance Ombudsman and as discussed above
- A notice should be given to Insurance Company and an unsatisfactory reply should have been received
- In case the reply is not received the notice given to the insurance company should stand unrelieved at least for 30 days
- The complaint must be done within a year of the events mentioned
- The total claim if monetary, should be within an amount of Rs. 20 lakhs
- The complaint should not be or have earlier been a part of any court hearing or consumer forums
Working of Complaint Redressing
The complaint can be lodged by any aggrieved individual who has taken an Insurance policy on personal lines. Insurance on personal lines can be defined as the policies taken or given in an individual capacity. Insurance on personal lines includes personal accident insurance, life insurance, med claim, and insurance of personal property or vehicle. If the person in whose name the policy is done is deceased, the legal heir can opt for redressing. Complaints can be lodged for both public as well as private insurers. The claim of insurance can be both lives as well as nonlife.
There are 17 Insurance Ombudsman redressing centers. Each has a confined geographical area of jurisdiction. So, it should be seen which center covers the area before lodging a complaint.
The complaint to the institution should be made in writing. It can be communicated to the Insurance Ombudsman via fax, e-mail, post or personal approach. As stated above, the total relief, if monetary, should be within the amount of Rs. 20 lakhs. There are conditions regarding the maximum time limit to approach the Ombudsman. The time for the amount under dispute should not exceed one year.
Although complaint redressing is legal, it is not necessary that the complaint should be brought to the Ombudsman by any lawyer. It depends upon the wish of the complainer if he wishes he can use a lawyer.
It was clarified in 2006 that a sole-proprietor cannot seek for redressing in Ombudsman. This is because these insurances are matters of commercial interest. It, therefore, does not fall under the spectrum of “personal lines” insurance. Discussing more on “personal lines” it is good to note that no other business firms can approach Insurance Ombudsman. Thus, partnerships, cooperative societies and associations, cooperative clients, and trusts cannot approach Ombudsman. However, those insurances which are concerned with individual claims can be redressed.
No such issues or complaints of administrating concerns like agents and staffs are entertained. These matters do not fall under the terms of reference of the Ombudsman.
There is a lot of debate on the time taken by the Insurance Ombudsman to dispose-off the complaint. In case both parties agree for meditation the Insurance Ombudsman can give its recommendation within 30 days. In case the parties hesitate to agree it shall pass its award within three months or 90 days. There are also provisions to hold hearings outside the headquarters.
There are no copies of complaints or queries and correspondence related thereto required to be forwarded to Governing Body. The Ombudsman deals directly without any interference from Governing Body of Insurance Council.
The decision proposed by the Ombudsman is final. It cannot be challenged once again in Ombudsman. The award or recommendations of the Insurance Ombudsman are subject to acceptance by both the parties. However, Insurance Ombudsman’s verdict does not violate the “Right to seek legal remedy”. So if any acceptance is non-agreeable on the part of any party, there are ways to recourse them using law measures.
Insurance Ombudsman and the Right to Information Act
If required the information can be sought through the Public Information Officer (PIC) of the concerned Insurance Ombudsman center. It can be given in the prescribed format on the requisite prescribed fee.