Resolving complaints through insurance Ombudsmen

Insurance Ombudsman: Everything You Need to Know! An ombudsman acts as a mediator and arrives at a fair recommendation/settlement based on the facts of a dispute.
Mar 2023
3 mins read
The Insurance Regulatory and Development Authority of India (IRDAI) has established an institution known as Insurance Ombudsman to assist policyholders in resolving their grievances outside of the courts in a cost-effective and neutral manner.
A person who has a grievance against an insurer may, either directly or through his legal heirs, nominee, or assignee, file a written complaint with the Insurance Ombudsman whose territorial jurisdiction includes the branch or office of the insurer complained about, as well as the complainant's residential address or place of residence.
The insurance ombudsman plays an important role in protecting the interests of customers and building trust in the system. Here are a few things you need to know about how an ombudsman operates:

  • Notwithstanding the separation of functions and domains, certain common aspects must be understood before addressing an Ombudsman. One, the Ombudsman should not be seen as the first point of call; instead, an attempt should be made to settle the grievance by writing to the relevant entity or organization. If the written complaint on the grievance to the responsible entity/authority is rejected entirely or partially, a complaint to the Ombudsman shall be lodged within the time frame specified in the respective regulations and guidelines.
  • Since the notion of an Ombudsman is intended to foster settlement between parties, practically all sectoral Ombudsmen endeavor to arrive at a settlement between the parties and resolve the dispute on mutually acceptable terms. Furthermore, the Ombudsman's proceedings are designed to be brief (that is, not elaborate or complicated). As a result, before addressing the Ombudsman, a person should consider if the grievance necessitates the production of complex records, proof, and so on. In such a case, it may be preferable to contact a court, tribunal, or arbitrator rather than an Ombudsman.
  • A policyholder who has a grievance against an insurance company may file it in writing with their local Insurance Ombudsman, either directly or through an assignee or nominee, or through their legal heirs. The complaint should clearly state the complainant's name, address, and other important details, the address and name of the insurance company against whom the grievance is lodged, the reasons for lodging the complaint, based on relevant documents, the type and amount of the loss caused, and the support or assistance required from the concerned insurance ombudsman.
  • Providing accurate answers during verification calls provides Ombudsman to perform quick eligibility checks. They have made it efficient through online document submission channels for approval procedures.
  • Do read policy documents carefully and approach the Insurance Company's office within the free-look period after receipt of the policy document. The free-look period permits a policyholder to analyse and evaluate the policy document. If a policyholder is not satisfied with the policy provisions as stated at the time of purchase, they may cancel it during the free-look period. Free-look time is a consumer-friendly feature that allows you to cancel a policy without penalty, such as a surrender charge.
  • One can reach out to ombudsman after the insurance company rejects ones complaint, doesn’t give a satisfactory resolution or doesn’t respond. But one should first, contact the insurance company and wait for a period of 30 days for a response. One can contact the Ombudsman if the company rejects your complaint, does not provide a satisfactory settlement, or does not respond to ones queries.
  • You can also raise a complaint to an Insurance Ombudsman on issues like partial or total repudiation of claims by the insurer, dispute regarding premium paid or payable with respect to a policy, misrepresentation of policy terms and conditions in the policy document, policy servicing related grievances against insurers, their agents and intermediaries and non-issuance of insurance policy after paying premium.
  • Conciliation and Award Making are the two primary responsibilities of an Insurance Ombudsman. Customers' grievances are also addressed and resolved by the institution. However, the powers of the insurance ombudsman are constrained to insurance contracts worth less than Rs. 20 lakh.
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