With the aim of ensuring speedy redressal of insurance disputes, the government published the Insurance Ombudsman Rules. These rules apply to all insurance companies in general and life insurance businesses in the public and private sectors.

The Insurance Ombudsman entertains disputes relating to delay in settlement of claims, a partial or total repudiation of claims, disputes over premium paid or payable in terms of insurance policy, misrepresentation of policy terms and conditions at any time in the policy contract, disputes relate to claim, certain policy servicing aspects that have financial implications, non-issuance of policy or any other matter resulting from the violation of provisions of the Insurance Act or the Regulations and Guidelines issued by the Insurance Regulatory and Development Authority.

If a claim is rejected, the complainant should file a review application with the grievance redressal department/nodal officer of the insurance company. If a reply is not received within one month or the reply is not satisfactory, then, a complainant may file a complaint with the Insurance Ombudsman’s office in the respective jurisdiction. The Insurance Ombudsman acts as a mediator to solve issues in an amicable manner.

For instance, in the case of  Mrs. Sumedha Vishweshwar Ranbhare vs New India Assurance Co Ltd., the appellant/complainant filed a complaint against the respondent/opponent demanding for payment of insurance claim. The complainant/appellant submitted that she was admitted in Lilawati Hospital from 26/04/2011 to 30/04/2011 and underwent hysteroscopy with endometriotic ovarian cystectomy. After discharge from the hospital, she made claim for hospitalisation charges with the respondent. However, the respondent refused to pay the medical claim to the complainant. Hence, the complainant approached the Insurance Ombudsman to resolve the issue. The Insurance Ombudsman directed the opponent to settle the claim of the complainant with respect to admissible expenses incurred during her hospitalisation in the Hospital. Accordingly, the opponent settled a sum of Rs.1,67,152/- to the complainant.

Complaint to the Insurance Ombudsman should be made within one year from

  • the date of receipt of the letter from the insurer rejecting the representation, or ​

  • the date of receipt of the decision of the insurer, which is not to the satisfaction of the complainant, or

  • when, even after one month of written representation made by the complainant, the insurer fails to respond.

Further, for a dispute to be entertained by the Ombudsman, the total relief sought should be within Rs. 30 Lakhs. In case both parties agree for mediation, the Ombudsman should give recommendations within one month. Otherwise, he shall pass his award within three months from the date of receipt of all requirements from the complainant. If the petitioner is not satisfied with the order passed by the Ombudsman, he/she may approach the Consumer Fora. At the same time, one must remember that if a case is already filed before the Consumer Fora, the same cannot be represented before the Ombudsman.

As per a report, Chennai Insurance Ombudsman received more than 1700 complaints in the year 2018. This number keeps increasing with complaints coming from various parts of Tamil Nadu. These days many consumers are availing insurance to avoid effects of some risks viz natural calamities, accidents, sudden deaths etc. But reaching out to Insurance Ombudsman will be difficult to most consumers as only one Ombudsman office is available in Tamil Nadu. Increasing Ombudsman offices and conducting awareness drives in every district of the state will be helpful for the consumers to get speedy and effective solution for the disputes.  

To learn more about Ombudsman Centres and their jurisdiction, one can log on to https://www.irdai.gov.in/Defaulthome.aspx?page=H1