Who is an Insurance Ombudsman ? What is “Insurance Ombudsman” role & limits in India? What is Ombudsman Scheme? How to find Insurance Ombudsman Address? How can I register a complaint to Insurance Ombudsman?
You are hearing of many claim rejection cases by Insurance companies. Some Insurance Companies have even started claiming that they have the highest Claim Settlement Ratio in the industry. As a Policy holder, you must know the provisions available under the law, in case of a claim rejection. Ombudsman Scheme is an important one in this regard.
What is Ombudsman Scheme?
The Insurance Ombudsman is appointed under the Redressal of Public Grievances Rules, 1998. The idea is to facilitate speedy redressal of Policy holder complaints out of the court. The Rules provide that certain disputes can be decided by the Insurance Ombudsman. The person for the post of Ombudsman is selected from the insurance industry, civil services or judicial services.
There are 12 offices of the Insurance Ombudsman. The territorial jurisdiction depends on the location of the branch of the Insurance Company against which the complaint is being filed.
Insurance Ombudsman – Address of 12 Offices
Insurance Ombudsman – Limits & Nature of Disputes
The Insurance Ombudsman can entertain only those disputes which are filed by an individual or his legal heirs, and that too if the claim is up to Rs. 20 lakh. The individual disputes can be in respect of the following:
(a) Part or total repudiation of any claim under an Insurance policy
(b) The amount of premium paid or payable for a policy
(c) The legal construction and interpretation of a policy for considering a claim under the policy
(d) Delay in settlement of claims
(e) Non-issuance of a policy after receipt of premium
Insurance Ombudsman – Procedure for Complaints and Process of Redressal
In case of any complaint, first the Policy holder or the Claimant is expected to approach the Insurance Company and submit the grievance. If the representation is rejected either totally or in part, or if no reply is received within a month, the insured/legal heir can approach the Ombudsman. A complaint to the Ombudsman is to be filed within one year from the date of final rejection of the claim. All supporting documents must be annexed to the complaint. The Ombudsman will collect all factual information that he may deem fit for deciding the dispute. There is no formal procedure to be followed and there is no need for an advocate. The Complainant and the Insurance Company’s officials will get an opportunity to be heard. Later, the Ombudsman considers the rival contentions and makes an Award which he thinks is fair in the facts and circumstances of the case. The Ombudsman, if he considers it fit, has the power to award an ex-gratia payment. This award will be sent to the Complainant as well as to the Insurance Company. The Complainant has one month’s time to consider whether to accept the award or not. If the Complainant is satisfied and willing to accept the order, he must communicate his acceptance to the Insurance Company within one month. The Insurance Company has to comply with the order within 15 days thereafter. In case, the Complainant does not communicate the acceptance of the order, then the Insurance Company may not implement the award. The Complainant would then be entitled to take recourse to any other legal remedy which may be available to him.
Thus, while the award is binding upon the Insurance Company, the Complainant has the option to accept or not to accept the award. If he is not happy with the decision, he can approach the Consumer Forum or the Civil Court.
Whether private companies are covered under the Ombudsman Scheme?
Yes, Ombudsman Scheme is applicable to LIC and all private Life Insurance companies. It is also applicable to all general insurance and health insurance companies.
Now you know the role and limits of Insurance Ombudsman. Please add your comments if you have any queries about Insurance Ombudsman.