Functions and Powers of Insurance ombudsman

Powers of ombudsman

Insurance Ombudsman mainly performs two types of functions as follows:

1.  Conciliation
2.  Award making

The Insurance Ombudsman is empowered to receive and consider complaints in respect of personal lines of insurance from any individual or policyholder who has any grievance against an insurer. The complaint may relate to any grievance against the insurer as enlisted below:

1. Any partial or total repudiation of claims by the insurance companies
2. Dispute with regard to premium paid or payable in terms of the policy
3. Dispute on the legal construction of the policy wordings in case such a dispute relates to his/her claims
4. Undue delay in settlement of insurance claims and
5. Non-issuance of any insurance document to customer’s alert receipt of premium.
6. Disputes arising on account of Claims Reimbursement, for e.g. excessive deductions that are made

However, an Ombudsman’s powers are restricted too insurance contracts of financial value not exceeding Rs. 20 lakhs. The insurance companies are required to honour the awards passed by an Insurance Ombudsman within three months, based on the melt and validity of an individual claim on case-to-case basis. An aggrieved person can lodge the complaint in writing which is addressed to the Insurance Ombudsman of the jurisdiction under which the office of the Insurer (or Insurance company) falls. The complaint can also be lodged through the legal heirs of the insured policyholder. Before lodging a complaint with the Ombudsman, the following features should be kept in mind:

1. The complainant or aggrieved should have made a representation to the insurer named in the complaint.
2. The insurer should have either rejected the complaint or if the complainant (or aggrieved policyholder) has not received any reply from the concerned insurance company within a period of one month upon receiving the complaint or the individual is not satisfied with the reply of the insurer
3. The complaint is not made later than one year after the insurer had replied in response to his/her queries.
4. An aggrieved policyholder should not have approached any court, consumer forum or arbitrator before pertaining to the same case.

When a complaint is settled through the mediation of the Ombudsman, he/she shall make the recommendations which he feels and thinks is far based on the merits, validity  and circumstances of each case without any bias, Such a recommendation shall be made by the Ombudsman not  later than one month upon hearing the case and couples of the same will be dispatched to the complainant and the insurance company concerned, who are the parties to this dispute. If the complainant or aggrieved policyholder accepts the recommendations, he/she needs to send a communication in writing within 15 days from the date of receipt by accepting the settlement. The Ombudsman shall pass an award within a period of three months from the receipt of receiving the complaint. The awards passed by the Insurance Ombudsman are final and binding upon the insurance companies. In case, if the policyholder is not satisfied with the award of the Ombudsman, he/she has the option of approaching other venues like Consumer Forum and Courts of Law for redressed of grievances.

Based on the regulations pertaining to protection of policy- holders, every Insurer (or Insurance Company) shall inform the policyholder accompanied with the policy document in respect of the Insurance Ombudsman in whose jurisdiction his/her office falls. This is for the purpose of grievances redressed, if any, that may arise during the process. A recent analysis depicting steady increase in number of complaints/ grievances received by various offices of Ombudsman across India implies that the policyholders are reposing their confidence in the institution of Insurance Ombudsman and IRDA.

Arjun Member since August 2, 2019

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