Insurance Ombudsman: All you need to know about

Harshvardhan RoongtaRoongta Securities

Insurance Ombudsman

• There are many complaints that policyholders have w.r.t to their insurance policies, most often they don’t know where to and how to complain. In 9 out of 10 cases people usually let go the claim only because they donot want to get into court cases, which is a very expensive and may go on for years.
• Therefore, to help individuals get their grievances redressed in a quick and cost effective manner, finance ministry has set up the “Insurance Ombudsman” Office.

Firstly, you can file complaints relating to both Life and General Insurance Policies. Complaints relating to the following can be filed:

a) Any partial or total repudiation of claim by an insurerb) Delay in settlement of claimsc) Non-issuance of policy document after receipt of premiumd) Any dispute w.r.t premium paid or payable in terms of the policye) Any dispute to legal construction of policies in so far as such disputes relate to claims.

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• Who can file : only individuals can file their complaints in the ombudsman office and not corporate / companies.

• What is the procedure:Take example of claims rejection: a) When a claim has been rejected, you have to make a review application with the insurance company`s grievance redressal department / nodal officer (every insurer is mandated to have such as department)

b) If a reply is not received within 1 month from the insurance company OR the reply is not satisfactory then you can file a complaint with the Insurance Ombudsman office in your jurisdiction.  Imp: Jurisdiction of the policyholder address and not the insurance companies address. Ex: policyholder stays in Mumbai but insurers office is in Chennai, you can file your complaint in Mumbai.

c) Few points to remember: i) you have to file your complaint within 1 year from the final communication from the insurer. If its after 1 yr then complaint will not be entertained.ii) The same complaint should not be pending before any forum / court or arbitration. If you have already filed a case in court then you cannot file with the ombudsman.

d) The procedure to file complaint is extremely simple. You may write a letter mentioning your policy number and the brief of your complain. Attach a copy of the policy document, claim form, claim rejection letter received and any other documents that you may have handy.

e) The ombudsman office will then write back to you giving you a complaint number and form P-II & P-III. These are simple forms that taking down the details in a particular format.

f) You are then required to submit the forms alongwith the documents as asked for in the Form P-II & P-III. You can send these documents via courier or post also, no need to visit the ombudsman office.

g) After this, a date will be fixed by the Insurance Ombudsman and a personal hearing will be granted to the policyholder and the Insurance Company is also called in that hearing.

h) Usually, in just one hearing the matter is resolved. There is no further system of giving another date and the case going on.

i) An executive from the ombudsman office is appointed to represent the policyholder free of charge to help (as the policyholder does not know all the rules of insurance ), hence no lawyer required.

Judgement:

• After the hearing the judgement is given then and there and the minutes prepared and both parties sign on the same.
• The most interesting part is that, the order of the Ombudsman is binding on the Insurance company, they cannot challenge the same in the court and have to go by the order, whereas, if the policyholder is not satisfied, she can continue and file a case in the court thereafter.

• As per the guidelines, the Ombudsman is required to dispose the complaint within 3 months from receiving the complaint, however, it takes about 1-1.5 years to get an award. This is due to the overload of complaints. Nevertheless, this is a very effective and zero cost way to get your complaint settled .

Difference between Insurance Ombudsman and IRDA IGMS ( Integrated Grievance management system )

• If your claim has been rejected and you say it should not be rejected, then there is a dispute. Somebody needs to hear both sides and see all the supporting documents. IRDA as a regulator does not do that for individual policies. IRDA IGMS does not have any adjudicating powers – that is – it cannot order insurance companies to pay claims. If you have filed your claim and the company is not responding then you can write to IRDA IGMS and they will direct the insurance company to process it quickly. Once the insurer rejects the claim, it cannot order them to pay.

• Such adjudicating powers are with the courts and Insurance Ombudsman

• Individuals should definitely approach the Ombudsman as the redressal is very quick and with zero costs.