Insurance ombudsmen may soon be allowed to deal with the grievances of individual consumers involving claims higher than the Rs 20 lakh permitted at present. The scope may also be increased to cover all kinds of complaints, including mis-selling, from the issue of a policy to its maturity.
The Insurance Regulatory and Development Authority (Irda) is looking into a proposal in this regard. Currently, an insurance ombudsman’s powers are restricted to mainly claims-related grievances concerning insurance contracts of up to Rs 20 lakh.
“Currently, 50 per cent of the complaints received by an ombudsman are outside its purview. Even ordinary people are taking insurance of Rs 50 lakh on the general side. So, there should be some reconsideration on that front,” said an executive with an insurance company.
The number of ombudsmen may be increased to handle the increased workload. All major state capitals may get one. At present, there are 12 ombudsmen — in Ahmedabad, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Kochi, Kolkata, Lucknow and Mumbai. These are drawn from the insurance industry, civil services and judicial services. “If the scope of the insurance ambit is increased, we have to see whether the existing number of ombudsmen can cope with the increased work burden or not,” said an official in the know.
The number of complaints received by insurance ombudsmen almost doubled from 12,812 in 2008-09 to 23,334 in 2010-11. However, the same pace of growth was not seen in disposals. Ombudsmen disposed 17,239 cases in 2010-11, against 11,417 cases in 2008-09.
A meeting of various stakeholders, including Irda, the Life Insurance Council and insurance companies, was held recently to discuss the proposals to strengthen the 14-year-old system and provide an enabling mechanism for protecting the interests of policyholders.
The office of the ombudsman is governed under the Redressal of Public Grievances Rules, 1998.
These detail appointment and office term, stipulations on staffing and administration, powers, manner of lodging a complaint and disposal.
The ombudsman can entertain complaints regarding partial or total repudiation of claims by an insurer, disputes on premium paid or payable, disputes on the legal construction of policies with regard to claims, delay in settlement of claims and non-issue of any insurance document to customers after receipt of premium.