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What is the Insurance Ombudsman and when should you approach it?

Insurance Ombudsman

One of the founding principles of insurance companies is to provide financial security to the insured individuals in the time of need. When someone purchases an insurance policy, they put their trust and faith in the company, believing that their claim will be honoured when the time comes. At the most fundamental and ethical levels, such confidence must be maintained.

However, it cannot be denied that insurance companies across the world function with the primary aim of generating profit, and it becomes essential to make sure that such profit motives do not come in the way of honouring claims made by the individuals. To make sure that the process of making claims is smooth and hassle-free, the Indian government has formed the Insurance Ombudsman. It aims to speed up the addressing of any grievance that a buyer might have against the insurer.

Having such a system in place ensures that there is a fair place for everyone and that people can wholly put their trust forward in the system and reap the benefits that it has to provide. In this way, the insurance sector sees an optimal growth as well, and this is a win-win situation for all.


Appointment of Ombudsman

The Ombudsman is a person in the insurance industry, civil or judicial services, and is appointed by the insurance council. The serving term of the Insurance Ombudsman is three years. According to the current data available on the website, through which the government aims to spread awareness about insurance policies, there are 17 Ombudsman in different locations across India.

Anyone who has a grievance against the insurer, through themselves or their legal heirs, or assignees and nominees, can approach the Ombudsman and file a complaint to have their grievances addressed. You can approach the Insurance Ombudsman if you have approached the insurance company with the appeal first but they have rejected it, or have not resolved the case up to your satisfaction, or have not responded at all in 30 days.

The complain that you make to the Ombudsman can be about the following cases:

  • Delay in claim settlements beyond the time specified by the insurance regulations.
  • Total or partial repudiation of claims made by the general insurer, health insurer, or the life insurer.
  • Disputes that fall around the payable premiums in insurance policies.
  • If the policy terms and conditions are misinterpreted at any time in the policy contract or document.
  • The legal construction of disputed insurance policies.
  • Grievances related to policy serving against agents, insurers, and intermediaries.

Basically, the complaint can be on any matter, which is a result of the violation of provisions under the Insurance Act, 1938. You can even file a complaint if there is a violation of the regulations, circulars, guidelines, or instructions issued by the IRDAI.

The settlement process

The Ombudsman acts as a mediator in these disputes and tries to arrive at an honest recommendation, which is based on the facts involved in the dispute. If you accept the decision taken by them, then they inform the insurance company of the same, and the company has to comply to the terms within 15 days.

If a recommended settlement works and it is found to be satisfactory, then the Ombudsman will be issuing an award within three months of receiving the complaint. However, if the satisfaction is still not reached and the case is not closed, then you have the option to go to an alternate authority. There, the insurance company has no other choice, but to adhere to the orders set out by the Ombudsman.

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