Insurance Ombudsman>>Brief note on the functioning of the
offices of the Insurance Ombudsman
institution of Insurance Ombudsman was created by a Government of India
Notification dated 11th November, 1998 with the purpose of quick disposal
of the grievances of the insured customers and to mitigate their problems
involved in redressal of those grievances. This institution is of great
importance and relevance for the protection of interests of policy holders
and also in building their confidence in the system. The institution has
helped to generate and sustain the faith and confidence amongst the consumers
Appointment of Insurance Ombudsman
The governing body of insurance council issues orders of appointment of
the insurance Ombudsman on the recommendations of the committee comprising
of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a representative of
the Central Government. Insurance council comprises of members of the
Life Insurance council and general insurance council formed under Section
40 C of the Insurance Act, 1938. The governing body of insurance council
consists of representatives of insurance companies.
Ombudsman are drawn from Insurance Industry, Civil Services and Judicial
Terms of office
An insurance Ombudsman is appointed for a term of three years or till the incumbent attains the age of sixty five years, whichever is earlier. Re-appointment is not permitted..
Territorial jurisdiction of Ombudsman
he governing body has appointed twelve Ombudsman across the country allotting
them different geographical areas as their areas of jurisdiction. The
Ombudsman may hold sitting at various places within their area of jurisdiction
in order to expedite disposal of complaints. The offices of the twelve
insurance Ombudsmans are located at (1) Bhopal, (2) Bhubaneswar, (3) Cochin,
(4) Guwahati, (5) Chandigarh, (6) New Delhi, (7) Chennai, (8) Kolkata,
(9) Ahmedabad, (10) Lucknow, (11) Mumbai, (12) Hyderabad. The areas of
jurisdiction of each Ombudsman has been mentioned in the list of Ombudsman.
The Ombudsman has a secretarial staff provided to him by the insurance
council to assist him in discharging his duties. The total expenses on
Ombudsman and his staff are incurred by the insurance companies who are
members of the insurance council in such proportion as may be decided
by the governing body.
Removal from office
An Ombudsman may be removed from service for gross misconduct committed
by him during his term of office. The governing body may appoint such
person as it thinks fit to conduct enquiry in relation to misconduct of
the Ombudsman. All enquiries on misconduct will be sent to Insurance Regulatory
and Development Authority which may take a decision as to the proposed
action to be taken against the Ombudsman. On recommendations of the IRDA,
the Governing Body may terminate his services, in case he is found guilty.
Power of Ombudsman
Insurance Ombudsman has two types of functions to perform (1) conciliation,
(2) Award making. The insurance Ombudsman is empowered to receive and
consider complaints in respect of personal lines of insurance from any
person who has any grievance against an insurer. The complaint may relate
to any grievance against the insurer i.e. (a) any partial or total repudiation
of claims by the insurance companies, (b) dispute with regard to premium
paid or payable in terms of the policy, (c) dispute on the legal construction
of the policy wordings in case such dispute relates to claims; (d) delay
in settlement of claims and (e) non-issuance of any insurance document
to customers after receipt of premium.
Ombudsman's powers are restricted to insurance contracts of value not
exceeding Rs. 20 lakhs. The insurance companies are required to honour
the awards passed by an Insurance Ombudsman within three months.
Manner of lodging complaint
The complaint by an aggrieved person has to be in writing, and addressed
to the insurance Ombudsman of the jurisdiction under which the office
of the insurer falls. The complaint can also be lodged through the legal
heirs of the insured. Before lodging a complaint:
i) the complainant should have made a representation to the insurer named
in the complaint and the insurer either should have rejected the complaint
or the complainant have not received any reply within a period of one
month after the concerned insurer has received his complaint or he is
not satisfied with the reply of the insurer.
ii) The complaint is not made later than one year after the insurer had
iii) The same complaint on the subject should not be pending with before
any court, consumer forum or arbitrator.
Recommendations of the Ombudsman
When a complaint is settled through the mediation of the Ombudsman, he
shall make the recommendations which he thinks fair in the circumstances
of the case. Such a recommendation shall be made not later than one month
and copies of the same sent to complainant and the insurance company concerned.
If the complainant accepts recommendations, he will send a communication
in writing within 15 days of the date of receipt accepting the settlement.
The ombudsman shall pass an award within a period of three months from
the receipt of the complaint. The awards are binding upon the insurance
If the policy holder is not satisfied with the award of the Ombudsman
he can approach other venues like Consumer Forums and Courts of law for
redressal of his grievances.
As per the policy-holder's protection regulations, every insurer shall
inform the policy holder along with the policy document in respect of
the insurance Ombudsman in whose jurisdiction his office falls for the
purpose of grievances redressal arising if any subsequently.
Steady increase in number of complaints received by various Ombudsman
shows that the policy-holders are reposing their confidence in the institution
of Insurance Ombudsman.