Insurance grievances are on a rise. Both life and non-life have almost equal share of complaints. The main difference is that life insurance complaints has mis-selling by intermediary, while non-life insurance has grievances against third party administrator (TPA) or surveyor. Wrongful denial or partial settlement of claims is a major grouse of policyholders. The other reasons for complaint are: Any dispute in regard to premium paid or payable in terms of the policy, Any dispute on the legal construction of the policies in so far as such disputes relate to claims, Delay in settlement of claims and Non-issue of any insurance document to customers after receipt of premium.
Speaking at an interactive seminar organised by Moneylife Foundation at Mumbai, AK Dasgupta, Insurance Ombudsman for the region, said, “Almost 90%-95% of grievances we receive are related to claim settlements. Insurer’s policy document is in such small letters that even the company representative could not read this. There is a lot of scope for improvement in handling grievances and we want customers to give us suggestions.”
Mr Dasgupta took charge of the Mumbai Ombudsman office in mid-May 2013. Over the period of last one year, Mumbai Ombudsman has solved more than 1,400 complaints, which is three to four times of the average complaints handled in an ombudsman office. Mumbai Ombudsman invited life and non-life insurance companies to take up non-complex cases for reconsideration. More than half of the cases were solved without any need of policyholder hearing. The decision was given in the favour of the customer. Thus, all the old cases (few of 2009-10) were closed and the ombudsman office started dealing with 2012-13 cases. The ombudsman office has started giving priority to senior citizen cases and those with critical illness. There was a need felt to help these consumer groups faster, so that any unfair claims rejection or partial settlement is given justice.
More and more people are now using Ombudsman route to resolve their insurance related issues. “I, till date, have not come across any case where the policyholder was not willing to accept the decision given by the Ombudsman,” Mr Dasgupta said adding, “the order for award has a timeline for insurer to pay. If the insurer has not paid award within stipulated time given in Ombudsman’s order, then interest is levied.”
He said while approaching Ombudsman for insurance grievances, policyholder needs to submit reasonable proof of claim submission. Even acknowledgment from courier can be considered as proof of submission for claim. But you need to first approach the insurer and if there is no response or the insurer has not responded in reasonable time, then you can reach Ombudsman’s officer, Mr Dasgupta said.
Regulations require the complaint to be resolved within 90 days of receipt, but it is unlikely any ombudsman office is able to adhere to the time line. The delay is due to overload of pending cases when the ombudsman takes charge of office. There are delays in appointment of ombudsman, which means there are several months, wherein there is no ombudsman, and hence, cases can pile on. Complaints can be settled, through mediation or agreement. When the complaint is not settled by mutual agreement the Ombudsman shall pass an award. The award to cover the losses suffered by the complainant shall not exceed Rs20 lakh. The awards are binding upon insurance companies. If the policyholder is not satisfied with the ombudsman’s award he can approach other forums such as consumer forums and courts for redressal.
Insurance ombudsman can only address grievance on policies on personal lines (both life and general insurance) or if deceased, the Nominee/legal their(s) of the deceased can make a complaint to the Insurance Ombudsman. It means businesses cannot approach ombudsman for grievance handling. Complaints are not entertained if : Complaint made one year after the insurer has rejected the claim, Complaint is on the same subject for which proceedings were made or pending before any court/consumer forum/arbitrator. Claim amount / Compensation more than Rs20 lakh.
If you have already made written representation to the Grievance Redressal Cell of the insurer and have no response or unsatisfactory response, you can approach Insurance Ombudsman under whose territorial jurisdiction the complainant resides. There are 16 Ombudsman offices: Ahmedabad, Bhopal, Chandigarh, Delhi, Hyderabad, Kochi, Lucknow, Noida, Pune, Bengaluru, Bhubaneshwar, Chennai, Guwahati, Jaipur, Kolkata, Mumbai and Patna. Metros like Mumbai and Delhi get high volume of complaints. There is no need for legal representation to fight your case as ombudsman services are meant to be low cost option to get justice.