IRDAI examining feedback on proposal to appoint internal ombudsmen in insurance firms: Ajay Seth

Ajay Seth, newly appointed Chairperson of IRDAI

An exposure draft proposing the appointment of internal ombudsmen within insurance companies has already been issued, and stakeholder feedback is currently under examination before the regulator finalises its guidelines, said IRDAI Chairman Ajay Seth.

Speaking at Bima Lokpal Day on November 11 in Mumbai, he said, the move aims to make insurers’ grievance redressal systems more efficient and transparent while ensuring policyholders receive faster resolutions to their complaints.

At the event, Seth also flagged persistent gaps in health insurance claim settlements, calling for greater transparency and fairness from insurers. He noted that while the number of claims settled remains high, the amount settled in full continues to fall short of expectations in several cases, a trend the regulator is closely monitoring.

The Bima Lokpal, India’s network of Insurance Ombudsmen, received 53,230 complaints in FY24, compared with 52,300 in FY23. Of these, health insurance accounted for 54 percent of all complaints, he said.

“Our expectation from insurers is clear which is prompt, fair, and transparent claim settlement. Anything less weakens the trust on which our industry is built,” Seth said, describing claims as “the moment of truth in any insurance journey.”

Seth said that ensuring a positive claims experience is essential to sustaining long-term trust among policyholders, particularly in health insurance, where expectations around settlement are the highest.

The Bima Lokpal network now comprises 18 offices across the country, following the inauguration of a new office in Thane last year. The new jurisdiction was carved out from the Pune and Mumbai Ombudsman offices.

Seth also urged insurers to make their internal grievance redressal systems more robust, responsive, and transparent. He added that companies should periodically review their processes and use feedback from Ombudsmen to improve efficiency and accountability.