Policyholders throng Insurance Ombudsmen offices

Number of registered complaints at these offices touches 24,782

The Offices of the Insurance Ombudsman across the country have seen a steady increase in the number of complaints registered through them by policyholders. Data from Insurance Regulatory and Development Authority (Irda) said that a total of 24,782 complaints were received by this office in 2012-13.

The institution of Insurance Ombudsman was created through a November 11, 1998 notification to quickly dispose grievances of insurance customers. According to this notification, the ombudsman shall pass an award within three months from receipt of a complaint.

The awards are binding upon insurance companies. If the policy holder is not satisfied with the award, he can approach other venues such as consumer forums and courts of law.

According to the Consumer Affairs Annual Booklet 2012-13 of Irda, life insurance complaints accounted for 15711 complaints while non-life stood at 9,071 for the period, On a year-on-year basis, the number of non-life complaints was marginally down from 9987 complaints in 2011-12, while that of life rose from 12353 in 2011-12.

The Ombudsman is required to dispose cases within a 90-day time frame. Although this number of insurance companies has gone up, the number of Ombudsmen offices across the country still remains 12.

This includes offices in cities like Chennai, Mumbai, Kolkata, Ahmedabad, Delhi, Guwahati, Kochi, Lucknow, Bhopal, Hyderabad, Bhubaneshwar and Chandigarh.

With 50-plus insurance companies in the country for the life and non-life insurance sector, on an average, the time taken to resolve a complaint ranges from six months to nine months.

At end of 2012-13, about 23357 complaints of the total complaints were disposed, while the others were still to be resolved. Though Irda showed that about 16148 complaints of the total complaints in 2012-13 were not entertainable, others related to non-issuance of document after paying premium, repudiation of claim, dispute with regard to premiums paid or payable.

Some complaints were also related to dispute on legal construction of policies as far as such dispute relates to claim.

“The data shows that several policyholders have been dis-satisfied with the claims processing and servicing by the insurance companies. While we are always present to serve the customers, it is imperative that insurers also take better steps to resolve claims, so that their policyholders are not required to approach us,” said an Insurance Ombudsman of East India.

While officials from Ombudsmen offices from various parts of country agree that several complaints by policyholders are of a frivolous nature, they said that some relate to serious lapses by the concerned insurer.

An official from an Ombudsman office pointed to issues which pertained to non-issuance of proposal form copy to the insured by a large life insurance company.

“Though there may not be big complaints against this practice, it is necessary that the insurer follows the appropriate procedure while handing out a new policy,” said the official.

In 2012-13, there were total of 341,012 registered life insurance complaints as compared to 309,613 for 2011-12. Among non-life companies, there were a total of 78,927 registered non-life complaints for 2012-13, compared to 93,155 complaints in 2011-12.

How the Ombudsman works:

- You can approach the Ombudsman if you first approached your insurance company with the complaint and they either have not resolved it, or not resolved it to your satisfaction or not responded to it at all for 30 days

-The Ombudsman can be approached if the value of the claim including expenses claimed is not above Rs 20 lakh. Hence, high value claims cannot be settled by Ombudsman

-Complaints can range from partial or total repudiation of claims by an insurer, any dispute about premium paid or payable, any dispute on the legal construction of the policies as far as it relates to claims or delay in settlement of claims.

-The Ombudsman will act as counsellor and mediator and arrive at a fair recommendation based on the facts of the dispute. If you accept this as a full and final settlement, the Ombudsman will inform the company which should comply with the terms in 15 days.

-If a settlement by recommendation does not work, the Ombudsman will pass an award within 3 months of receiving the complaint and which will binding on the insurer. Ex-gratia payment can also be awarded.

-Once the Award is passed, you have to accept the award in writing and the insurance company has to be informed of it within 30 days and the Insurance company has to comply with the award in 15 days after that.