Moneycontrol PRO
Open App
Live: LIVE: India 5G Launch | PM Modi at the launch of 5G Services

Insurance Ombudsman online case hearings: Better later than never

The new changes will mean that customers can file complaints and also attend hearings for claim rejections from their own homes via video conferencing.

March 06, 2021 / 09:52 AM IST

Frederick D’Souza, a consumer activist from Mumbai who assists senior citizens in filing insurance complaints felt that the location of the Insurance Ombudsman office was the biggest disadvantage. Customers would have to travel several hours to file complaints and attend hearings for cases.

D’Souza says that many older customers would merely be dissuaded by the travel. The government has now come to the rescue of senior citizens and many others by allowing video-conferencing-based case resolutions.

This is part of a series of changes undertaken under the Insurance Ombudsman Rules 2017 amendment by the finance ministry. The changes are intended to ensure that customers are not inconvenienced by the bureaucratic procedures followed to file a complaint and follow-up from there onwards.

In 2020, 47-year-old Garima Pathak, a resident of Thane (outskirts of Mumbai) had filed a complaint against a partial payment of a health insurance claim. But she was later told that she would need to travel about 120 kilometers away to Pune because her area came under the jurisdiction of that office.

"It was ridiculous that I needed to travel so far to file a complaint and also attend hearings. So I decided not to pursue this case," she added.


Pathak now has the option to refile the grievance and then continue the hearings online from home.

Customers can approach an Insurance Ombudsman within one year of their claim being rejected. Policyholders have to first formally complain to the insurance company and if the insurer does not reply for a month or the reply is unsatisfactory, they can approach the Ombudsman.

The claim limit under Insurance Ombudsman is Rs 30 lakh and it should be a matter that is not being heard under any court or a consumer forum. After receiving all the documents, the Ombudsman has to pass the order within 90 days and the insurer has to adhere to the decision (pay claims, premium disputes) within 15 days.

Instead of including Mumbai and its outskirts in one centre, the Ombudsman Office in Mumbai handles complaints only of Goa and Mumbai Metropolitan Region. For those in the rest of Maharashtra, Thane, and Navi Mumbai, complaints are handled by the Pune office.

The same story holds in other parts of the country. To get matters heard and grievances resolved, customers are required to travel frequently to the larger towns and capital cities which is neither cost-effective nor feasible during the Coronavirus outbreak.

While data is not publicly available, it is estimated that 10,000-15,000 complaints are resolved by Insurance Ombudsman offices every year across its 17 locations in India. Most complaints (about 60 percent) pertain to a repudiation of claims of medical insurance or inadequate payments.

Ombudsman offices are empowered to hear cases related to claims (non-payment, repudiation, or partial payment), the premium payable, misselling, and also policy-servicing-related grievances.

For Prasad Choudhury, the insurance agent who nudged him to buy a life insurance product with complex investment rules was the sole reason why he got trapped.

"I was initially promised upto 10 percent return by the broker which was very attractive. Later, I was told by the insurer that I would only receive 3.5 percent which was not acceptable. When I did not receive a satisfactory reply, I was told Ombudsman is an option but then brokers were not in their ambit so I had to eventually continue the policy whose purchase was a big mistake," he added.

For customers like him, there are good days ahead because insurance brokers are also brought under the ambit of the Ombudsman. This means that misselling complaints can also be filed against insurance brokers.

Any decisions taken by the Ombudsman with respect to the return of the premium collected under these cases will be binding on the insurance brokers as well.

These changes have come at a time when several insurance customers were complaining about the inability to visit Ombudsman offices to resolve grievances. While the flexibility to file online complaints and attend court hearings from home should have been offered long ago, these amendments are better late than never.
M Saraswathy is a business journalist with 10 years of reporting experience. Based in Mumbai, she covers consumer durables, insurance, education and human resources beat for Moneycontrol.
first published: Mar 6, 2021 09:52 am
ISO 27001 - BSI Assurance Mark