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Insurance ombudsman

Topics Covered: Statutory, regulatory and various quasi-judicial bodies.

Insurance ombudsman:

Context:

The government has amended insurance ombudsman rules.

As per the new rules:

  1. Insurance brokers are now covered under ombudsman rules.
  2. Policyholders are now allowed to file online complaints.
  3. The scope of complaints has been enlarged to ombudsmen from only disputes earlier to deficiencies in service on the part of insurers, agents, brokers and other intermediaries.
  4. The ombudsman may use video-conferencing for hearings.

About Insurance Ombudsman:

The Insurance Ombudsman scheme was created by the Government of India for individual policyholders to have their complaints settled out of the courts system in a cost-effective, efficient and impartial way.

Who can approach?

Any person who has a grievance against an insurer, may himself or through his legal heirs, nominee or assignee, make a complaint in writing to the Insurance ombudsman.

One can approach the Ombudsman with complaint only if:

One has first approached insurance company with the complaint and;

  1. They have rejected it
  2. Not resolved it to satisfaction or
  3. Not responded to it at all for 30 days

And the value of the claim including expenses claimed should not be above Rs 30 lakhs.

Appointment of Ombudsman:

The Ombudsman is a person in the insurance industry, civil or judicial services, and is appointed by the insurance council.

  • The serving term of the Insurance Ombudsman is three years.

The settlement process:

Recommendation:

The Ombudsman will act as mediator and

  • Arrive at a fair recommendation based on the facts of the dispute
  • If you accept this as a full and final settlement, the Ombudsman will inform the company which should comply with the terms in 15 days.

Award:

If a settlement by recommendation does not work, the Ombudsman will Pass an award within 3 months of receiving all the requirements from the complainant and which will be binding on the insurance company.

Once the Award is passed:

The Insurer shall comply with the award within 30 days of the receipt of award and intimate the compliance of the same to the Ombudsman.

 

InstaLinks:

Prelims Link:

  1. About the Insurance Ombudsman scheme.
  2. Process.
  3. Appointment.
  4. Award.

Mains Link:

Discuss the roles and functions of Insurance Ombudsman.

Sources: the Hindu.