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Ombudsman In Insurance

The Role of Ombudsman in Insurance

The Insurance Ombudsman scheme was created by the Government of India for rendering services to individual policyholders to settle their complaints via the out-of-court system in a cost-effective, efficient, and impartial way.

There are 12 Insurance Ombudsmen in different locations throughout the country. The policyholder can approach the Insurance Ombudsman office under the same jurisdiction where the complaint has been registered and the location of the insurance company’s office.

Here are some conditions under which you may approach the Insurance Ombudsman:

  • The policyholder first approached the insurance company with the complaint, but the company has not resolved it
  • A complaint has been resolved, but the resolution is not up to the insured’s satisfaction
  • The insurance company has not responded to the complaint for more than 30 days
  • The complaint pertains to any policy you have taken in your capacity as an individual and the value of the claim, including expenses claimed, is not above Rs. 20 lakhs

Your complaint to the Insurance Ombudsman can be with regard to:

  • Any partial or total repudiation of claims by an insurer
  • Any dispute about premium paid or payable in terms of the policy
  • Any dispute on the legal structure of the policies as far as it pertains to the claims
  • Delay in settlement of claims
  • Non-issue of any insurance document to you after you pay your premium

The Settlement Process

The settlement process goes through pre-determined steps.

1. Recommendation: The Ombudsman will act as a counselor and mediator for the following reasons:

  • 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 insurance company, which has to comply with the terms within 15 days

2. Award:

  • If a settlement by recommendation does not work, the Ombudsman will pass an award within 3 months of receiving the complaint. This award will be a spoken award, with the detailed reasoning binding on the insurance company but not binding on the policyholder.
  • The Ombudsman can also award ex-gratia payment.

Note that once the award is passed you have to accept the award in writing and the insurance company has to be intimated of it within 30 days. The insurance company has to comply with the award in 15 days after that intimation.

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