Insurance Ombudsman offices go headless, complaints pile up

Next time you go to the Insurance Ombudsman office in your region, don’t be surprised if you are required to wait for months to get a reply. Insurance Ombudsman offices across 17 regions have remained headless for almost four months and despite several attempts, the positions have not been filled.

Sources told Moneycontrol that about 6,000-7,000 cases are pending and these numbers could go up if the positions are not filled.

“We have invited applications for the post of the Insurance Ombudsman across the offices. However, we are yet to fill the positions, we are hoping to complete it by the end of this quarter,” said an official close to the development.

The Insurance Ombudsman as an institution was created through a November 11, 1998 notification to quickly dispose grievances of insurance customers. According to this notification, the ombudsman is required to pass a decision within three months from receipt of a complaint.

The awards are binding upon insurance companies. However, if the policy holder is not satisfied with the award, he can approach other venues such as consumer forums and courts of law. Insurance Regulatory and Development Authority of India (IRDAI) had earlier invited applications for appointment of Insurance Ombudsman at Ahmedabad, Bengaluru, Bhopal, Chennai, Chandigarh, Guwahati, Hyderabad, Jaipur, Kochi and Mumbai.

Post this, Bhubaneshwar, Delhi, Kolkata, Lucknow, Noida, Patna and Pune have also been added to the vacant list.

Upto end of calendar 2017, there were seven Ombudsman offices that had a head and 10 others that did not. Data for FY18 is not yet available. Usually, most cases have the judgements in favour of the policyholder.

As on end of financial year 2016-17, the various Ombudsman offices had a backlog of 2330 cases. About 27,627 cases were received in FY17. A total of 27,990 cases were disposed during that year (there was a backlog of 2693 cases from FY16). Financial payouts of Rs 60 crore across the 17 centres were given by these offices in FY17.

Earlier there were only 12 Insurance Ombudsman offices. However, this was later increased to meet the demand of the increasing grievances filed by policyholders. But on an average, the head posts of these offices have been vacant for almost two to three years.

Much like the Banking Ombudsman, the insurance watchdog looks into customer grievances that insurance companies fail to resolve. Unlike consumer courts where policyholders are required to pay a fee, the Insurance Ombudsman office resolves cases free of cost.