Insurance grievance redress is heavily against the common man: Finance Secretary

In a frank comment that should put the insurance companies to shame, the Finance Secretary attacked the current insurance grievance redressal system as ‘inadequate’ and urged the industry not to betray the trust of the common man

Finance Secretary Rajiv Takru on Wednesday gave a candid speech at 16th CII Insurance Summit in Mumbai. Describing his speech as a talk from his heart, he spoke about the reality of mis-selling, grievance redressal being heavily against the common man and urging insurance companies to be fair in business practices, so that company performance comes from investments and not denial of claims. “Betrayal of trust should not happen in an industry that is based on customers buying products with trust”, he said.

Pointing to mis-selling he said that some agents may promise the moon to sell the policy. He remarked about Max Life TV ads wherein the devil unsuccessfully tries to persuade the agent to mis-sell. Mr Takru, added, “In real life, the devil always wins. There are fine prints in insurance policies and hence, we get so many complaints. Someone in the ICU of a hospital is not able to negotiate with health insurer or hospital and hence ends up paying the money. There may be claim denials or partial settlement. There is a need to rectify the system.”

According to Mr Takru, “The grievance redress system is not up to mark. I am the last man to think that having the Ombudsman in place or having grievance redressal instead of Ombudsman is going to reduce the problem. We are a poor, illiterate country and not such a country where the average common man would take recourse to legal option to resolve disputes. It is rare for a common man to stand up against corporate might. Grievance redressal is heavily built against the common man. There is a need to develop a system wherein the grievances do not arise, or if they do arise, then there is a very small percentage.”

Mr Takru gave his own example where he was mis-sold by a smooth talking Life Insurance Corporate of India (LIC) agent in 1992. He was told that the premium of Rs3,000 has to be paid for 15 years. In case of unfortunate death, his family will get Rs1 lakh. If not, then he can claim the maturity benefit of Rs1 lakh at the end of 15 years. After diligently paying premium for 15 years, to his shock he found that the maturity benefit will be paid when he turns 80 years. So, he has to wait for another 34 years after premium payment term of 15 years to get his Rs1 lakh. He says that if it can happen to a literate person, then it is surely an issue for illiterate persons.

Mr Takru suggested insurance companies should be fair as insurance is about trust. It is not business alone, but has social angle. The performance should be from investments and not based on claims denied. It is bad business which leads to betrayal of trust.

If Mr Takru wants real change, he should nudge the Insurance Regulatory and Development Authority (IRDA) to get more active. At the Moneylife Foundation’s seminar on 16 May 2012, IRDA chairman J Hari Narayan clarified that IRDA’s job is not to focus on individual complaints; but it does take up such cases on a random basis and investigates insurance companies to protect the insured. IRDA’s approach is to put systems in place and see how they work and that corrections are made whenever required, to improve processes, he had added. This is a flawed approach because wrong products and wrong selling is common.

It means individual complaints may not get solved by IRDA’s Integrated Grievance Management System (IGMS). Consumers still have to go to the insurance Ombudsman, consumer court or civil court. The advantages of Ombudsman are no cost to the insured and binding decision on insurance companies. While the insurance Ombudsman is a good option, there is often a delay in getting a hearing. It can range from six months to one year after making a complaint. In some places the Ombudsman’s post is vacant for several months. This increases the backlog of complaints. 

Read: IRDA’s consumer redress system -1: Lot of scope for improvement?

LIC agents likely to recommend less suitable product: Harvard Study

Life insurers and agents hide the truth: Harvard study



nagesh kini

4 years ago

We certainly do not need an extremely top most sarkari babu from our MOF to tell us about the utterly sorry state of affairs of the so-called Insurance Grievance Redress Mechanism. There is no Insurance Ombudsman retired in September 2012. The Secretary Revenue surely ought to know this and what is holding up. Even with a heavy backlog the Ombudsman has to travel to Goa and Nagpur.
The fate of the mechanism at the individual insurance company's is a big question mark - almost non-existent!
Mr Thakru please do something at least, now that you say you were a victim of mis-selling.


4 years ago

I personally do not believe in the concept of Insurance because all the insurance products offered by these insurance companies are meant for legally fleecing one's hard earned money and some greedy people fall prey to the traps laid by these companies. Mathematically if we calculate the value of the money invested in any of these insurance products, we can lead to see the losses incurred in the end and these companies are seen to be benefitted a lot.

Sapan Shrivastava

4 years ago

Insurers come to cheat not to serve. Its white collor robbery.



In Reply to Sapan Shrivastava 4 years ago

Yes,you are absolutely right but the common indian population do not understand this and if we people will not encourage these looters then only, this legal and licensed looting will stop,


4 years ago

IRDA looks at convenience of PSU insurance cos. including LIC and large brokers.

When a small individual policy holder complains with IRDA,its NEVER replied or the reply favors insurance co.

IRDA'a so called toll free call center is most un professionally managed.Grivence web portal is also hopeless and a SHOW PIECE.

Ombudsman is equally worse for a individual policy holder.Its a TOTALLY waste of tax payer's money.

Ombudsman AND OTHER STAFF COMFORTABLY rests in a posh air-conditioned offices with NO ACCOUNTABILITY.


With increase of Pvt.Insurance cos with existing PSU insurance cos. , and gradual increase in insurance penetration – there should be SEPERATE regulators, grievances settlement procedures for a small individual policy holder and a large corporate / manufacturing / industrial policy holders.

For small and individual policy holder MAY BE an ombudsman office / IRDA remains open on holidays and extended working hours for a common man to get fast and appropriate JUSTICE.



In Reply to deepaksb 4 years ago

...and not to mention about time when there is no ombudsman in office for few months. Like in Mumbai this year and last year in Ahmedabad. The backlog keeps increasing. Getting an hearing within 6-12 months should be considered lucky!


In Reply to raj 4 years ago ombudsman is still a hope for existing grievance handling system.. the decision is binding on insurance companies...


In Reply to raj 4 years ago

Justice delayed is justice denied.

Why we adopt a system which does not work for a common cicizen ? Is it not a time to scrap such system and impmement something which works in the interest of common citizen ?

Consume orginisations and individual activits must push for some working reforms to tackle of problems faced by a common citizen.


4 years ago

The Finance Secretary, Mr. Rajiv Takru, who is not only literate, but also an eminent economist, is duped by the Agent of LIC. Similarly, I was also duped by an illeterate agent of SBI Life, who used to market on behalf of his wife, though I am a banker.

Smartphone sales up 46.5%, Samsung still leader in June quarter

Samsung retained the number one position in the overall mobile phone market, followed by Nokia, Apple and LG at second, third and fourth position, respectively. In mobile OS, Android garnered 79% market share to maintain its lead while Apple iOS’ share declined to 14.2%

Information technology research and advisory firm Gartner on Wednesday said, global sales of smartphones grew 46.5% to reach 225 million units while that of feature phones declined 21% to 210 million units across the world in the June quarter.


"Smartphones accounted for 51.8% of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time," said Anshul Gupta, principal research analyst at Gartner.


This is the first time that sales of smartphones exceeded that of feature phones. Worldwide mobile phone sales to end users totalled 435 million units in the second quarter of 2013, an increase of 3.6% from the same period last year, Gartner said.



Samsung maintained the number one position in the global smartphone market, with its market share reaching 31.7%, up from 29.7% in the second quarter of 2012.


The company sold 71.38 million smartphone units in the reported quarter followed by Apple, which sold 31.89 million units during the same period. Apple's market share, however, declined to 14.2% from 18.8% last year, it said.


LG Electronics sold about 11.47 million units while Lenovo's sales stood at 10.67 million units during the second quarter of 2013. Their respective market share stood at 5.1% and 4.7%.


Gartner said Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1%, 55.7% and 31.6% respectively, as smartphone sales grew in all regions.


Samsung retained the number one position in the overall mobile phone market too, with sales to end users growing 19% in the second quarter of 2013.



Samsung sold around 107.52 million units across the world and has a market share of 24.7% during Q2 of 2013. It is followed by Nokia, which sold 60.95 million units and has a market share of 14%. Apple and LG have 7.3% and 3.9% market share, respectively during the period.


"With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year", Gupta said.


In the smartphone operating system (OS) market, Android continued to increase its lead, garnering 79% of the market in the second quarter. Apple iOS remained at second position, however, its market share declined to 14.2% from 18.8%, same period last year.



Microsoft overtook BlackBerry for the first time in this segment, taking the number 3 spot with 3.3% market share in the reported period.


"While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users," Gupta added.



allen markow

4 years ago

If you take your smartphone to bed with you, then check out this item on Amazon A very useful holder nightstand for your smartphone. 5 star.

July inflation accelerates to 5.79% on high food prices and weak rupee

Inflation accelerated to 5.79% in July mainly driven by higher food prices and costlier imports as rupee fell to a record low

Rising prices of onions and other vegetables pushed inflation to a five-month high of 5.79% in July even as the government and the Reserve Bank of India (RBI) battled to stabilise the domestic currently.


The July number is above the Reserve Bank's comfort level of 4-5% inflation. This is the highest level of inflation since February 2013, when it was 7.28%.


According to Nomura Financial Advisory and Securities (India) Pvt Ltd, while the jump in wholesale price index (WPI) inflation has been across the board, two components explain the bulk of the surprise today. "First, vegetable price inflation jumped 46.6% y-o-y in July versus 16.5% in June, led by a steep increase in the prices of onions and potatoes reflecting rainfall irregularities and supply disruptions. Onion prices have continued to ascend in August, suggesting that vegetable price inflation will be higher next month as well. Second, mineral oil price inflation rose to 16% y-o-y in July from 9.6% in June as rising global crude oil prices and a weak currency have resulted in oil prices jumping to an all-time high in INR terms. This trend has persisted in August, suggesting that fuel price inflation will also continue to inch higher," it said.  


As per official data released on Wednesday, WPI inflation in the food articles category rose to double digits at 11.91%, driven by rising prices of onions, cereals and rice. Inflation based on the WPI was at 4.86% in June. In July 2012, it was 7.52%.


The rate of the price increase in food articles, which has a 14.34% share in the WPI basket, was at 9.74% in June. Inflation in food articles has risen for the third straight month.


Onion prices on annual basis more than doubled in July, shooting up by 145%. Vegetables prices went up by 46.59% during the month from 16.47% in June.


Nomura said, “We are revising our average WPI inflation forecast to 5.7% in FY14 from 5% earlier (versus 7.3% in FY13). Of the two factors, vegetable prices and the weak rupee, we expect vegetable prices to reverse later in the year. Domestic demand also remains weak. However, currency depreciation remains a risk and this will continue to drive input costs higher. Additionally, base effects are adverse after September. Hence, we expect WPI inflation to grind higher to above 6% in the coming months.”


Planning Commission Deputy Chairman Montek Singh Ahluwalia said the rise in inflation was mainly on account of depreciation in the currency against the dollar and hoped that as the supply side improves, food inflation would come down.


"With the currency appearing to stabilise, I don't expect this (inflation) to continue. I think if we can get moderation on the food front once the impact of the good monsoon becomes available, I think we will end the year (with inflation) between 5% and 6%," he said.


The declining value of the rupee has made imports of oil costlier and pushed up fuel and power inflation to 11.31% in July.


"Going ahead, imported inflation may rise a tad due to INR depreciation, but its impact should be subdued because of weak second round effects. Further, some softening in food inflation can also be expected on back of a normal monsoon, which will result in headline inflation easing towards about 5.0%, " said Edelweiss Securities Ltd in a note.


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