The chamber said insurance industry in totality should be covered under this scheme even if they had an in-house grievance redressal cells.

"Ombudsman scheme should have broad coverage ie. not only individuals, but corporates should also come under the ambit of ombudsman especially in Indian context where small scale industries and partnerships firms form a large portion of trade," the chamber said.

PHDCCI also suggested that expenses of ombudsman should be recovered from insurance companies by levy of cess based rational criteria.

"The constitution of governing body under clause five of draft notification should not be confined only to the representatives from insurance companies but such governing body of ombudsman should consist of professionals, corporate representatives and eminentpersons with expertise in different fields," the PHDCCI said.

The chamber said this body should be independent and free to frame its own rules and regulations. PHDCCI suggested that there should be no limit to financial claims which is proposed at Rs 20 lakh. The chamber cited the example of the United Kingdom.

"Here the pattern of United Kingdom where ombudsman can decide up to fixed amounts and makes the recommendation to the insurance company for excess amount be considered," it said.

Ombudsman should not be restricted to the settlement of claims alone, but should cover other related disputes under a policy of insurance as well, it said.

There should be a proper machinery and mechanism for selection of ombudsman, besides its functionaries,the PHDCCI said.

The governing body of ombudsman should be headed by the chairman of the Insurance Regulatory Authority (IRA) or an eminent person from outside the insurance industry, the chamber said.

According to the PHDCCI, the number of ombudsman shouldbe as much as to cover the entire insurance industry throughout the country like banking sector which has 13 ombudsmen at present. This would ensure speedydisposal of the cases referred to the ombudsman seeking redress.