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Govt issues new rules for insurance ombudsman

An insurance ombudsman is created for individual policyholders to have their complaints settled out of the court's system in a cost-effective, efficient and impartial way. (photo: iStock)Premium
An insurance ombudsman is created for individual policyholders to have their complaints settled out of the court's system in a cost-effective, efficient and impartial way. (photo: iStock)

  • It shall receive and consider complaints relating to deficiency in services provided by an insurer, not just disputes, and on any matter arising from the violation of provisions or rules of Insurance Act, 1938, or of the IRDAI Regulations, 2017

Soon, you may be able to submit and track the status of your complaints lodged with any office of the insurance ombudsman via an online platform. On 22 December, the finance ministry issued a draft Insurance Ombudsman (Amendment) Rules, 2020, to amending the 2017 Insurance Ombudsman Rules. Under the new rules, the Council for Insurance Ombudsmen will take over the duties of the Executive Council of Insurers.

According to the circular, "...an online platform has to be developed by the Council for Insurance Ombudsmen for online submission and tracking of the status of complaints lodged with any office of Ombudsman."

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Chandan D. S. Dang, executive director,SecureNow.in, a Delhi-based online insurance broking firm, said the draft rules specify insured-friendly changes such as providing an online management system for submission and tracking of complaints to Ombudsmen. Dang added that, "As per the new notification, the Ombudsman may, on his own or the request of the complainant, hear a matter through video conference if he is satisfied that circumstances so require, after notifying the complainant and the insurer concerned, subject to guidelines issued by the Council for Insurance Ombudsmen in this regard and published on its website."

What is an insurance ombudsman?

An insurance ombudsman is created for individual policyholders to have their complaints settled out of the court's system in a cost-effective, efficient and impartial way.

Currently, as per policyholder.gov.in website, there are 17 insurance ombudsman in different locations and any person who has a grievance against an insurer, may himself or through his legal heirs or nominee, can make a complaint in writing to an insurance ombudsman within whose jurisdiction the branch or office of the insurer complained against or the residential address or place of residence of the complainant is located.

Complaints related to deficiency in insurance services to be considered

Dang said the insurance ombudsman shall receive and consider complaints relating to deficiency in insurance services provided by an insurer (and not just on disputes), and on any other matter arising from the violation of the provisions or rules of the Insurance Act, 1938, or of the IRDAI Regulations, 2017. This also covers violation of the terms and conditions of the policy contract. "The Council structure seems to have been made more independent of insurers which is good, and there is an option of online hearing that has been created. This was much needed," Dang added.

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