Insurance Ombudsmen help settle disputes between policyholders and insurers
The insurance regulator has brought out an advertisement for appointment of ombudsmen at eight centres. Multiple centres across the country have remained headless for more than six months, leading to a pile-up of complaints.
At present, Ahmedabad, Delhi, Bhubaneswar, Kolkata, Lucknow, Patna, Pune and Noida are headless. After remaining headless for almost two years, Mumbai has former insurance executive Milind Kharat as the Ombudsman (from May 2018) overseeing complaints of Mumbai and Goa.
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 policyholder is not satisfied with the award, he can approach other venues such as consumer forums and courts of law. At the end of FY18, there were 10,583 complaints pending for resolution across the Ombudsman offices.
Unlike the courts where individuals have to pay legal fees, insurance ombudsmen offices offer dispute resolution services free of cost. Due to this, customers whose claims have been delayed or denied can approach this forum to get the decision reviewed.
Since this body settles most complaints in the favour of the policyholders, having an Ombudsman heading the office ensures that the complaint will be addressed quickly. In cases where there are is an absence of hard evidence, benefit of doubt goes to the complainant.
Take the case of Vipin Kumar Yadav. His life insurer rejected the death claim filed by his kin. This was on the basis of statements recorded from fellow villagers who said that he had committed suicide and that this wasn’t a natural death. The Ombudsman ruled that stray statements of villagers cannot be taken as proof and asked the insurer to pass the claim.
At a time when trust deficit is one of the major issues plaguing the insurance sector, timely payments and resolutions of complaints are needed on an immediate basis to change the perception. Having a fully-functional Ombudsman only helps the cause.
