The Insurance Ombudsman Rules, 2017, provide a structured mechanism for resolving complaints related to insurance policies in a cost-effective and impartial manner. These rules are crucial for policyholders seeking redressal for grievances against insurers and their intermediaries.

1. What is an Insurance Ombudsman and What is His Role?

The Insurance Ombudsman is an official appointed to resolve complaints regarding personal lines of insurance, group insurance policies, and policies issued to sole proprietorships and micro enterprises. The Ombudsman operates under the guidelines set by the Council for Insurance Ombudsmen (Rule 5). The primary role of the Ombudsman is to act as a mediator and counsellor, facilitating the resolution of disputes between policyholders and insurers (Rule 13).

2. Process to Lodge a Complaint with the Insurance Ombudsman

To lodge a complaint, the policyholder or their legal heirs, nominee, or assignee must submit a written complaint to the Ombudsman within whose jurisdiction the insurer’s office or the complainant’s residence is located (Rule 14). The complaint can be submitted in writing, via email, or online through the Council’s website. The complaint must include the complainant’s details, the insurer’s details, the facts of the case, supporting documents, and the relief sought.

3. Types of Complaints Entertained by the Ombudsman

The Ombudsman handles complaints related to:

•              Delay in claim settlement beyond the specified time (Rule 13(a)).

•              Partial or total repudiation of claims (Rule 13(b)).

•              Disputes over premium payments (Rule 13(c)).

•              Misrepresentation of policy terms (Rule 13(d)).

•              Legal construction of insurance policies related to claims (Rule 13(e)).

•              Policy servicing grievances (Rule 13(f)).

•              Non-issuance of insurance policies after premium payment (Rule 13(h)).

•              Non-adherence to IRDAI regulations (Rule 13(i)).

4. Limitations to Lodge a Complaint

Complaints must be lodged within one year of the insurer’s decision or the expiry of one month from the date of the complainant’s representation to the insurer (Rule 14(3)). The Ombudsman can condone delays if necessary (Rule 14(4)). Complaints are not maintainable if the matter is pending or disposed of by any court, consumer forum, or arbitrator (Rule 14(5)).

5. Types of Decisions Awarded by the Ombudsman

If mediation fails, the Ombudsman can pass an award based on the evidence presented (Rule 17). The award must be in writing and state the compensation amount, which cannot exceed the actual loss or ₹50 lakhs, including expenses (Rule 17(3)). The award must be finalized within three months of receiving all requirements from the complainant (Rule 17(4)).

6. Mandatory Acceptance and Implementation of the Award

The award is binding on the insurer, who must comply within 30 days of receiving it and update the complaints management system (Rule 17(6)). The complainant is entitled to interest on the awarded amount from the date the claim should have been settled (Rule 17(7)).

7. Role of IRDAI in the Insurance Ombudsman Process

The Insurance Regulatory and Development Authority of India (IRDAI) plays a supervisory role in the Ombudsman process. It can refer complaints to the Ombudsman and review annual reports on the Ombudsman’s activities (Rule 18). The IRDAI, in consultation with the Council for Insurance Ombudsmen, can recommend improvements to the Central Government (Rule 20).