Complaints against private life insurers went up to 2,89,336 in FY14 from 2,67,978 in FY13 and that of state-owned Life Insurance Corporation rose to 85,284 from 73,034.
THE Insurance regulator has taken a grim note of the growing number of unresolved complains from policyholders, noting that grievances are not being handled by companies in the prescribed manner. As a result, policyholders are escalating their complaints — for both life and non-life insurance — to higher authorities, such as the ombudsmen, and even Irdai.
“It is noticed that insurers are found wanting in paying attention, sensitivity and alacrity needed to be shown while attending to the complaints from policyholders and other statutory agencies,” says a circular issued by the Insurance Regulatory and Development Authority of India.
Policyholders’ complaints are registered through the Integrated Grievance Management System (IGMS), which was set up by the regulator in 2011. A central repository of complaints received by all insurers enables a policyholder to escalate any unresolved complaint or issue to the regulator and also track the status online. The system allows a policyholder to lodge a complaint against an insurer, broker or an intermediary in respect of any point of sale, servicing or claims related issue.
Data from Irdai show that total reported complaints for life insurance policies rose to 3,74,620 in FY14 from 3,41,012 in the previous year. Complaints against private life insurers went up to 2,89,336 in FY14 from 2,67,978 in FY13 and that of state-owned Life Insurance Corporation rose to 85,284 from 73,034. For non-life insurance, the reported complaints were 63,335 in FY14 and outstanding complaints 2,664. Irdai has said insurers must ensure that the timelines set in the regulations are adhered to while handling complaints. It has also emphasised that not only frontline staff, but also customer service staff and officials at all levels be sensitised about the issue.
At the time of registration on IGMS, the policyholder has to enter the unique identification parameters, which are then used for log-in. These could be mobile number, landline number, passport number, PAN or voter ID details.
Once registered, the individual can lodge a complaint and track it through subsequent log-ins. A reference number is generated for each unique complaint, which can be used to edit or track the complaint. The system’s software assigns and tracks the unique complaint ID and also initiates pre-defined actions or intimations to all parties involved.
The IGMS software can be used only if a complaint has already been registered with the insurer or the intermediary’s own grievance redressal mechanism. He/she must provide all relevant policy details and applicable history of the complaint. The system is integrated with every insurer’s complaint management system and the policyholder is kept informed at every step. If the policyholder is not satisfied with the resolution provided by the insurer, he can escalate the complaint for a review by Irdai.
Typically, for insurance companies, most consumer grievances are related to product features that are not explained at the time of selling the policy. Misselling of insurance products results in the policy getting lapsed because of non-payment of premiums. Analysts say examples like selling inappropriate products like Ulips for short-term goals and giving erroneous information on guaranteed products are among the most common customer grievances. Other areas of consumer grievances are settlement proceeds not received by the policyholder, surveyors not reaching on time to assess the damage in case of non-life claims and disputes on total settlement amount and documentation.
After receiving the complaint, the insurer has to send a written acknowledgment to the policyholder within three working days and attend to the complaint within 15 days of its receipt.