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How to get complaints resolved when insurance companies dont act
Economic Times, March 18, 2019

For policyholders, the insurance ombudsman offices offer hope when insurers fail to redress their grievances, despite escalation to senior executives. Since an insurance ombudsman’s orders are binding on insurers, there is little room for them to wriggle out. However, what if the insurance companies accept the award and fail to, or delay, implementation?

Violation of faith
A recent circular from the Insurance Regulatory and Development Authority of India (Irdai) says between April and December 2018, many insurers neither complied with the ombudsman verdict within 30 days of receiving the award nor filed appeals within 60 days. “Few insurers are submitting that they have complied with the award post timelines stipulated. Non-compliance within the timelines severely undermine the grievance redressal framework,” noted Irdai. The regulator also pulled up insurers for not specifying reasons for delay. It also issued a warning. Taking note of the transgressions, Irdai stated: “Non-compliance of awards by insurers within the timelines prescribed will be viewed very seriously.”

Clearly, the possibility of the commitment made during a hearing not being honoured is a cause for concern not only for the insurance regulator and ombudsman, but also for aggrieved policyholders. A delay in payment of compensation adds to their grievances. While the regulator will take action as it deems fit, policyholders ought to understand the rules and rights they are entitled to in case of flawed implementation of the ombudsman awards.

Grievance redressal
If you are one of those who have got the rough end of the stick from insurers twice over, you will have to persevere further to get your due. “The ombudsman awards are binding on insurers. There may be a delay, but they have no option but to comply. Irdai as well insurance ombudsman offices monitor compliance closely and follow-up with insurers,” says Milind Kharat, Insurance Ombudsman, Mumbai office. You can enlist the intervention of these two entities again for resolving the matter, after allowing the company adequate time to comply, as outlined in the Ombudsman rules, 2017.

The maximum compensation that an insurance ombudsman office can award is Rs 30 lakh (including costs incurred by complainant), up from Rs 20 lakh prior to revision of rules. The offices are required to finalise the findings and pass an award within three months of receiving documents and other requirements from the policyholder. Next, a copy of the verdict is sent to both the complainant and the insurance company, which has to comply with the order within 30 days and inform the ombudsman.

“The complainant shall be entitled to such interest at a rate per annum from the date the claim ought to have been settled under the regulations, till the date of payment of the amount awarded by the Ombudsman,” the rules stipulate. In case of delay, ensure that the insurer makes the compensation payout along with this interest. As per Protection of Policyholders Regulations, 2017, the interest rate will be two percentage points over the prevailing bank rate, which is currently 6.5%.

The grievance redressal mechanism

The first point is your insurer’s grievance redressal offi cer; the contact details can be found on the company’s website If there is no response or you are not satisfi ed, escalate the complaint through Irdai’s integrated grievance management system (igms.irda.gov.in)

You can directly approach the insurance ombudsman offi ce under whose jurisdiction your case falls If you are not satisfi ed with the ombudsman’s decision as also any delayed or inefficient implementation of an award passed.

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