What to do when insurance claim is rejected; 3 top points to note

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New Delhi | Published: June 19, 2017 4:27:58 AM

The Insurance Ombudsman can award compensation up to `30 lakh for any dispute related to a life, health or general insurance policy.

Insurance Ombudsman, insurance, consumer friendlyThe Insurance Ombudsman will have an executive council consisting of nine members including the chairman.

In a consumer-friendly move, the insurance regulator has simplified the rules for operations of ombudsman. Policyholders who have any grievance against their insurers can approach the Insurance Ombudsman to seek quick redressal.

Complaints against insurers

Insurance Regulatory and Development Authority of India (IRDAI) in a circular has said that the ombudsman will receive complaints regarding the delay in settlement of claims beyond the time specified in the regulations. It will look into compliants regarding any partial or total repudiation of claims by any life, general and health insurer, disputes over premium paid or payable and misrepresentation of policy terms and conditions at any time in the policy document or policy contract.

The ombudsman will act as a counsellor and mediator and arrive at a fair recommendation based on the facts of the dispute. If the policyholder accepts the decision of the ombudsman, then it will inform the company which will comply with the terms. The Insurance Ombudsman can award compensation up to `30 lakh (including relevant expenses) for any disputes related to an insurance policy.

How to reach the ombudsman

The complaint will have to written and signed by the complainant or his legal heirs or nominee. Supporting documents will have to be provided, the nature and extent of the loss caused and the relief sought from the ombudsman will have to be mentioned. The complainant will have to mention the name of the branch or office of the insurer against whom the complaint is made. No fee or charges are to be paid for availing the services.

The complaint will have to filed within one year after the order of the insurer rejecting the representative’s claim is received. Also, the policyholder can file the complaint to the ombudsman after expiry of a period of one month from the date of sending the written representation to the insurer if the company fails to furnish a reply to the complainant.

As per the regulator’s norms, the insurer has to comply with the decision of the ombudsman within 30 days from the date of receipt. If it does not accept the ombudsman’s decision, it can then approach the consumer forum. The ombudsman will provide both the parties reasonable opportunity of being heard before an award is passed.

There are at present 17 Insurance Ombudsman. Analysts say while there is a fixed jurisdiction for every ombudsman, there are not too many offices across the country. As a result, aggrieved policyholders are not able to escalate their grievances to the ombudsman.

Executive council of insurers

The Insurance Ombudsman will have an executive council consisting of nine members including the chairman. The members would comprise two persons from life insurance companies nominated by Life Insurance Council, two general insurers and one standalone health insurer nominated by General Insurance Council. There will be one representative from IRDAI and one from ministry of finance, plus the LIC chairman and the chairman of General Insurers’ Public Sector Association (GIPSA) . The chairman of the executive council will be either the LIC chairman or the GIPSA chairman by rotation.

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The nominations to the executive council will be revised every three years and a member of the executive council will not be eligible for re-nomination. The executive council shall issue guidelines for its functioning.

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