Insurers to ramp up teams for grievance redressal after Irdai whip

Irdai has asked insurers to handle policyholder grievances with seriousness, promptness and empathy to enhance the trust and confidence in the insurance sector

With the Insurance Regulatory and Development of Authority of India (Irdai) cracking the whip on insurers to handle customer grievances in a time-bound manner, companies are looking to strengthen redressal teams.

In a circular to insurers, Irdai said sensitivity and alacrity should be shown while attending to complaints from policyholders and from other statutory agencies. “We do have turnaround times that are part of the business strategy. But in some cases, due to lack of adequate information and documentation or in orphaned policies, there are delays,” said a senior life insurance executive.

According to the Protection of Policyholders’ Interest Regulations, 2002, an insurer carrying on life or general business has to respond within 10 days of the receipt of any communication from its policyholders.

These include matters such as recording change of address, noting change of nomination, issuance of duplicate policy and providing information on matters like accrued bonus, surrender value and entitlement to a loan, among others.

According to the executive cited above, with  growth in volumes of policies, grievances have also risen. “Teams will be ramped up, so that no complaint goes unanswered. Use of information technology has also proven effective.”

Irdai regulations state that where a proposal form is not used, the insurer shall record the information obtained orally or in writing, and confirm it within a period of 15 days and incorporate it in the policy. Here, the onus of proof rests with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover.

“Each of the insurers have their own turnaround times. While the regulator has stated that written acknowledgment to a complainant has to be sent within three working days of the receipt of the grievance, there are delays,” said an official in an Ombudsman office in Maharashtra.

If the grievance is not resolved, policyholders can approach the Ombudsman office in their region. If they are still dissatisfied with the decision, they can move the court.

According to Irdai, there is a need to sensitise not only the front-line staff but also customer service staff and officials at all levels. They have been asked to handle policyholder grievances with seriousness, promptness and empathy to enhance the trust and confidence in the sector.