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An ombudsman’s award is binding on the insurance company

An ombudsman’s award is binding on the insurance company
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First Published: Tue, Jul 15 2008. 04 59 PM IST

Updated: Tue, Jul 15 2008. 04 59 PM IST
What is the role of an insurance ombudsman in redressing grievances? Who appoints the ombudsman? How does one approach him?
The 12 ombudsmen across the country have been allotted different geographical locations as their areas of jurisdiction. Details of the ombudsmen are available on the IRDA website at http://www.irdaindia.org/ombudsmenlist_nov07.htm
Redressing grievances
The complaint by an aggrieved person has to be in writing and addressed to the ombudsman of the jurisdiction under which the office of the insurer falls. The complaint can also be lodged through the legal heirs of the insured.
Before making a complaint, the customer should remember the following points:
• The complainant should have made a representation to the insurer named in the complaint and, either the insurer should have rejected the complaint or the complainant should not have received any reply within one month after the insurer has received his complaint; in case the insurer does respond and the policyholder is not satisfied with the reply, then also he can approach the ombudsman.
• The complaint is not made later than a year after the insurer had replied.
• The same complaint on the subject should not be pending with before any court, consumer forum or arbitrator.
• The institution of insurance ombudsman was specifically created with the purpose of quick disposal of grievances of insured customers and to mitigate their problems involved in redress of those grievances. The institution has helped generate and sustain the faith and confidence among consumers and insurers.
Appointment of ombudsman
The governing body of the Insurance Council issues orders of appointment of the ombudsman on the recommendations of the committee comprising IRDA chairman, LIC chairman, GIC chairman and a representative of the Central Government. The Insurance Council consists of members of the Life Insurance Council and General Insurance Council formed under Section 40C of the Insurance Act, 1938. The governing body of the Insurance Council consists of representatives of insurance companies. Ombudsmen are drawn from the insurance industry, the Civil Services and Judicial Services. An ombudsman is appointed for a term of three years or till the incumbent attains 65 years, whichever is earlier. Re-appointment is not permitted.
The governing body has appointed 12 ombudsmen across the country allotting them different geographical areas as their areas of jurisdiction. The ombudsman may hold sittings at various places within their area of jurisdiction in order to expedite disposal of complaints. The offices of the 12 insurance ombudsmen are located at Bhopal, Bhubaneswar, Cochin, Guwahati, Chandigarh, New Delhi, Chennai, Kolkata, Ahmedabad, Lucknow, Mumbai and Hyderabad.
Role of the ombudsman
An insurance ombudsman performs the functions of conciliation and claims award-making. He is empowered to receive and consider complaints in personal insurance from any person who has any grievance against an insurer, including:
• Any partial or total repudiation of claims by the insurance companies
• Dispute with regard to premium paid or payable in terms of the policy
• Dispute on the legal construction of the policy wordings in case such dispute relates to claims
• Delay in settlement of claims and non-issuance of any insurance document to customers after receipt of premium.
The ombudsman’s powers are restricted to insurance contracts of value not exceeding Rs20 lakh. The insurance companies are required to honour the awards passed by an Insurance Ombudsman within three months.
When a complaint is settled through the mediation of the ombudsman, he shall make the recommendations that he thinks fair in the circumstances of the case. Such a recommendation shall be made not later than one month and copies of the same sent to the complainant and the insurance company concerned. If the complainant accepts the recommendations, he will send a communication in writing within 15 days of the date of receipt, accepting the settlement. The ombudsman shall pass an award within a period of three months from the receipt of the complaint.
The awards are binding upon insurance companies. If the policyholder is not satisfied with the ombudsman’s award he can approach other forums such as consumer forums and courts for redress. As per the policy-holder’s protection regulations, every insurer shall inform the policy holder along with the policy document in respect of the insurance ombudsman in whose jurisdiction his office falls for the purpose of grievances redress arising if any subsequently.
The insurance company from whom I bought a health plan for my parents has rejected a claim in respect of my mother’s hospitalization, stating that her ailment was relating to a pre-existing disease. However, our doctor refutes the stance taken by the insurer. Whom should we approach for redress, since insurers do not provide clear-cut guidelines in such cases? Our insurer has stopped responding to our pleas.
In case of such a dispute, you are advised to approach the insurance ombudsman. The post of an insurance ombudsman has been specially created by the government for the redressal and quick disposal of insured customers’ grievances.
The details of the ombudsmen are available on the IRDA website, at http://www.irdaindia.org/ombudsmenlist_nov07.htm
Also read the responses to the question above.
Readers are welcome to write in with their life and general insurance queries to insurancequeries@livemint.com. The questions will be answered by senior executives from leading insurance firms.
Ajay Bimbhet is managing director, Royal Sundaram Alliance Insurance Company Ltd.
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First Published: Tue, Jul 15 2008. 04 59 PM IST