insurance awareness study material

Insurance Awareness: Insurance Ombudsman in India – Chapter 8

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Insurance Ombudsman in India

What is Ombudsman– Ombudsman is an official appointed to act in the interests of the public by investigating and addressing complaints to resolve the grievances of the public.

Insurance Ombudsman– is an official appointed by the Selection Committee to resolve all complaints of insurance, group insurance policies, policies issued to sole proprietorship and micro enterprises on the part of insurance companies and their agents and intermediaries in a cost-effective and impartial manner.

Presently the Insurance Ombudsman Rules, 2017 is in effect.

Term of office of Insurance Ombudsman-

  • appointed for a term of three years
  • eligible for reappointment.
  • Age not more than seventy years.

Executive Council of Insurers

  • Executive Council of Insurers consisting of nine members including the Chairperson.
  • The Chairperson of the Executive Council of Insurers shall be either the Chairman of the LIC of India or the Chairman of the General Insurers’ (Public Sector) Association of India (GIPSA) by rotation.

Number of Insurance Ombudsman in India

Presently there are 17 Insurance Ombudsman offices in India.

Timeline to lodge a complaint to Insurance Ombudsman

  • A person can file a complaint with Insurance Ombudsman only after the complainant had not received any reply within a period of one month after the insurer received his representation.
  • A person cannot file a complaint with Insurance Ombudsman after 1 year has passed since the date of receipt of the decision of the insurer which is not to the satisfaction of the complainant

The settlement process under Insurance Ombudsman

Step 1: Mediation

  • The Insurance Ombudsman will act as a mediator between complainant and insurer and arrive at a fair recommendation based on the facts of the dispute
  • If the complainant accepts this as a full and final settlement, the Ombudsman will inform the company which should comply with the terms in 15 days.

If mediation does not work.

Step 2: Passing of award

If a settlement by recommendation/mediation does not work, then the Insurance Ombudsman will pass an award (that would be binding on the insurance company) within 3 months of receiving all the requirements from the complainant.

Step 3: After the award is passed, the insurer has 30 days to comply with the award.

Maximum Award by Insurance Ombudsman

Rs 30 Lakhs or amount of loss suffered whichever is less

Advisory Committee

An Advisory Committee consisting of eminent persons not exceeding five and including one Central Government nominee shall be constituted by the IRDAI to review the performance of the Insurance Ombudsman from time to time.

Points to remember:

  • No fee is charged by Insurance Ombudsman
  • Any complainant, whose complaint on the same subject matter is or was before a Court/Consumer Forum or an Arbitrator cannot approach an Insurance Ombudsman.
  • Insurance on personal lines means an insurance policy taken or given in an individual capacity, e.g. life insurance, personal accident insurance, medical insurance, insurance of personal property of the individual such as motor vehicle, household articles, etc.

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