Policyholders can now approach the insurance Ombudsman if their insurer does not respond within one month of receipt of the complaint for claims of up to Rs.30 lakh. So far, Ombudsman could only award claims of up to Rs.20 lakh.
Insurance Ombudsman is responsible for protecting the interests and settling grievances of policyholders. The main objective behind appointing Ombudsman is to settle the grievances and complaints of policyholders outside court system in a cost-effective, efficient and impartial manner.
Though the government has increased the scope of compensation through Ombudsman, experts feel that the industry has a long way to go. “It is good that the government has increased the compensation amount that Ombudsman can award. In my view, it will help non-life policyholders but for life insurance industry, this limit is not enough,” said Kapil Mehta of SecureNow.
Another insurance broker said that the move might not help the industry. He said, “Firstly, there are many cases pending with the Ombudsman. On an average, Insurance Ombudsman takes one and a half year to settle a case. The government should simplify the procedure to lodge complain with them and fix a maximum time limit to settle such cases. In addition, Insurance Ombudsman can deal only with individual policyholders currently. The scope of Ombudsman should not be limited to individual policies only. Group and corporate plans should also be included.”
Currently, policyholders have to approach either consumer forum or district court if the sum assured is over Rs.30 lakh. Most life insurance policies have a sum assured of over Rs.30 lakh.
Aggrieved policyholders need to first lodge their complaints with the insurers. If the insurance company doesn’t respond to a complaint within 30 days or if the policyholder is not satisfied with the response, policyholders can approach the insurance Ombudsman. The Ombudsman accepts written complaints only.
IRDAI clarified that any complainant who has approached the consumer forum or arbitrator previously on the same matter cannot seek redressal from the Ombudsman.
There are 17 insurance ombudsmen across India.
