The suggestion was made by a division bench of Chief Justice Mohit Shah and Justice Anoop Mohta while hearing a public interest litigation (PIL) filed by a city-based social worker Gaurang Damani pointing out the hardships being faced by Medi-claim policy holders.
"The IRDA should consider setting up of a forum or an ombudsman to look into the insurance-related complaints.
Instead of dragging such matters to court or consumer forum, you can have an ombudsman to handle it," the bench said.
The IRDA informed the court that draft regulations have been prepared for settling insurance claims and that they would be placed before its Board for consideration.
The bench has posted the matter for further hearing on January 7 and directed for a senior officer of IRDA to remain present in the court for assistance.
Damani in his PIL had alleged that there were no standard guidelines to settle insurance claims and it was often done at the whims and fancies of Third Party Administrators (TPA).
He also argued that the TPAs were not entitled to settle claims, but were found to be doing so in several cases.
"TPA receives financial incentives to reduce claim ratio," said Damani adding there was discrimination in settling insurance claims of individuals and that of corporate clients.
According to the PIL, problems began in July 2010 after public sector insurance companies, acting through TPAs, suddenly stopped offering cashless medi-claim benefits to consumers in top hospitals in the metros.
Earlier, over 1,500 hospitals used to offer cashless policy claims and there was no need for a patient to bother about paying cash while undergoing treatment as it would be settled by the insurance company. The scheme was, however, withdrawn reportedly due to many irregularities witnessed.