Salient features of Insurance Ombudsman

The insurance ombudsman scheme was established through a Government of India notification dated 11th November 1998 under section 114(1) of the Insurance Act of 1938. The purpose of establishing the insurance ombudsman is to quickly dispose of the grievances of the insured customers and to reduce their problems concerning such grievances settled out of the court system in a cost-effective, efficient, and impartial way. The office of the Insurance Ombudsman is mandated to resolve all complaints about policies issued on personal lines of insurance, group insurance policies, and policies issued to sole proprietors and micro enterprises. (A micro-enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees)

Any person who has a grievance against an insurance company (or insurance broker, as the case may be) may himself or through his legal heirs, nominee, or assignee, make a complaint in writing to the Insurance Ombudsman situated within the territorial jurisdiction of the office of ombudsman. Complaints may be lodged through electronic mail or online through the online platform developed by the Council of Insurance Ombudsmen through the website www.cioins.co.in. The details of the territorial jurisdiction of the 17 offices of the Insurance Ombudsman are available on the Offices of Ombudsman website under the section “About Us”.

As per Section 13(2) in the Redressal Of Public Grievances Rules, 1998, the complaint shall be in writing duly signed by the complainant or through his legal heirs and shall state clearly the name and address of the complainant, the name of the branch or office of the insurer against which the complaint is made, the fact giving rise to complaint supported by documents, if any, relied on by the complainant, the nature and extent of the loss caused to the complainant and the relief sought from the Ombudsman. The Insurance Ombudsman can entertain complaints where the compensation awarded does not exceed rupees 50 Lakhs (including relevant expenses, if any).

The following documents are required to be attached along with the complaint.

1) Copy of representation submitted to Insurance Company/ Insurance Broker

2) KYC particulars: Aadhar card, PAN card, Driving License, etc

3) Photograph (in case of online registration of complaints)

4) Letter from the Insurance Company/ Insurance Broker rejecting the representation / repudiating the claim.

5) A copy of the Insurance Policy

6) Any other document(s).

The Insurance Ombudsman can entertain complaints alleging deficiency in performance required against Insurance companies (including its agents and intermediaries) on the following grounds:

* Delay in settlement of claims, beyond the time specified in the IRDAI regulations.

* Repudiation of claim (partial or total) by the insurance company (life insurer, general insurer or health insurer);

* Disputes over premium paid or payable in terms of insurance policy;

* Policy terms and conditions at any time in the policy document or policy contract misrepresented;

* Legal construction of insurance policies in so far as the dispute relates to the claim;

* Grievances against policy servicing related matters with insurers and their agents and intermediaries;

* Policy is not in conformity with the proposal form submitted by the proposer;

* Non-issuance of insurance policy after receipt of premium in life insurance and general insurance including health insurance; and any other matter arising from non-observance of or non-adherence to the provisions of any regulations about protection of policyholders’ interests or otherwise, or of any circular, guideline or instruction issued by the Authority, or of the terms and conditions of the policy contract.

Before submitting the grievance to the ombudsman, the complainant must have made a complaint to the concerned Insurance Company/Insurance Broker, and the Insurance Company/Insurance Broker failed to furnish a reply even after the expiry of one month from the date of the complaint or the complainant is not satisfied with the response given by Insurance Company/Insurance Broker.

A complaint can be lodged with the Office of the Insurance Ombudsman within one year from the date of rejection of the complaint by the Insurance Company/Insurance Broker or expiry of one month of filing the complaint if the Insurer fails to reply. However, no complaint is entertained if the same subject matter on which proceedings are pending before or disposed of by any court consumer forum, or arbitrator.

Other important features of the ombudsman scheme:

As per the Insurance Ombudsman Rules 2017, there is no provision to engage a lawyer.

When both parties agree to mediation, the Insurance Ombudsman shall give his recommendation within 1 month of the date of receipt of mutual written consent for such mediation; otherwise, he shall pass his Award within 3 months of the receipt of all requirements from the complainant.

No charges are required to be paid for complaining with the Insurance Ombudsman.

The Insurance Ombudsman will conduct a hearing of both parties either in person or through video conferencing if he considers it necessary.

The award of the Insurance Ombudsman shall be binding on the insurers (or insurance broker, as the case may be). However, if the complainant is not satisfied with the decision of the Insurance Ombudsman, he/she may exercise the right to take recourse to the normal process of law against the Insurance Company/Insurance Broker.

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