Insurance policyholder’s grievance redressal system is in a mess with all the 17 insurance ombudsman centres in the country currently vacant. How can Insurance Regulatory and Development Authority of India (IRDAI) have no insurance ombudsman in service for all insurance ombudsman centres across the country? It is a dubious record created by IRDAI, which the outgoing chairman will not be proud of. Why has it been difficult to fill the position of insurance ombudsman? IRDAI needs to explain the reasons.
In September 2017, Moneylife had written about the
Mumbai ombudsman office not having full time ombudsman for the past 18 months. As per an RTI response dated 17 January 2018 from the office of the governing body of the insurance council, “There was no full time insurance ombudsman at Mumbai since 15 May 2016”. The ombudsman from the Pune office had been given additional charge of the Mumbai office to help resolve the complaints. However, the Pune ombudsman has retired since and there is no respite yet for Maharashtra and Goa policyholders’ complaints.
The same RTI reply shows that the total number of complaints filed with the Mumbai ombudsman’s office in the period between January 2017 and June 2017 is 1,812. Surprisingly, the office of the governing body of the insurance council says that the number of complaints resolved out of 1,812 is not available with them. However, the total number of complaints resolved during the period of January 2017 and June 2017 is 1,985, including complaints pending from earlier period. The total number of complaints pending with the Mumbai insurance ombudsman office as of December 2017 end is 926.
RTI reply shows that total number of complaints filed between the period of January 2017 and June 2017 across all the insurance ombudsman offices is 13,157. Office of the governing body of insurance council says that number of complaints resolved out of 13,157 is not available with them. However, the total number of complaints resolved during the period of January 2017 and June 2017 is 13,613. The total number of complaints pending across all the insurance ombudsman offices as of December 2017 end is 8,058, including complaints pending from earlier period. Surprisingly, information on the date from which the oldest complaint is pending is not available with the council.
As new cases are filed in the new year 2018, the number of outstanding complaints will increase, and there will be delays in resolving them, as posts continue to remain vacant. Apparently, consumer issues are not a priority for the insurance regulator.
The institution of insurance ombudsman had been useful in the past in providing remedies to aggrieved insurance policy holders. There are 17 insurance ombudsman offices across the country. For more details on the insurance Ombudsman please visit
http://www.gbic.co.in/ombudsman.html
The ombudsman office helps in settling matters when there are inordinate delays in courts, including consumer courts. The ombudsman is an independent office that provides speedy and cost-effective resolution of customers' grievances in case the insurance grievance cell of companies has not been able to provide a satisfactory response to complaints. Usually, the waiting period for a policyholder after filing the complaint with the ombudsman is three to six months when the ombudsman is operating. Any disruption due to non-availability or part-time tenure of the ombudsman results in a long backlog of cases getting piled up. For obvious reasons, when consumers file a complaint, they are not given a timeframe in which they can hope to get a hearing or redressal.
Insurance grievances are on the rise. Both life and non-life have almost equal share of complaints. The main difference between them is that life insurance complaints include mis-selling by an intermediary, while non-life insurance has grievances against third a party administrator (TPA) or a surveyor. Wrongful denial or partial settlement of claims is a major grouse of policyholders. The other reasons for complaints are, dispute in regard to premium paid or payable in terms of the policy, dispute on the legal construction of the policies in so far as such disputes relate to claims, delay in settlement of claims and non-issue of any insurance document to customers after receipt of the premium.
New Insurance Ombudsman Rules 2017 have come into force under which the Authority to appoint the Insu. Ombudsman is vested with the EXECUTIVE COUNCIL OF INSURERS. Earier too or after 2017 rules IRDAI had/has no power to appoint but now IRDAI is vested with power to appoint AN ADVISORY Committee to oversee the functioning of the Ombudsman ( which IRDAI has not done till Dec.2017 as per RTI reply)and in case of any proved misconduct, IRDAI has the power to remove him from office. However, my experience shows that neither in the past nor in future IRDAI had any inclination to act. IRDAI is a mere
Paper Tiger and act as a post office as far as Consumer matters are concerned .There was an officiating Ombudsman Mr. A K Sahoo till 31 March 2017 who was posted in Pune. But as most of the Ombudsmen do normally favour the Insuracne Companies, especially the New India Assurance Company as in Mumbai , Maharashtra and Goa. Not not only the Ombudsman salary but the entire Ombudsman office expenses are borne by the earlier GBIC and now renamed Executive Council of Insurers. The Chairman of this body since last few years is CMD of the NIAC, thus Omudsmen try to remain in his good books.
I have on record two such cases. One was in the past when Shri A K Das Gupta used to the Ombudsman. He had relied on the unverified statments of the NIAC and had passed an award in its favour rejecting the claim of an Insured. However, he being a conscientious person, had superceded his earlier award with a new one giving relief to the IP when he was confronted with the explanation/reply received from the IRDAI. Of course, it is a different matter that the MANDATORY award of the Ombudsman is NOT IMPLEMENTED by the NIAC , in spite of his reminders.When the IP complained of this to the Chairman IRDAI to issue suitable directions to the defaulting Insurance Company ,IRDAI failed to do any thing to uphold the dignity of Ombudsman Award and Trust of the aggreived Insured Persons. However, his successor Mr. A K Sahoo who was there till March 2017, stoically refused to reconsider the documentary proof submitted to him to remove the fatal error on the face of his award based on patently false and unverified denial of the NIAC. Details of both the cases are available with me or the Consumer Complaints Cell (CCCell) .CCCell in Dec. 2017 itself had taken up the APPOINTMENT issue of Ombudman in 17 States of India, but IRDAI, as usual has not responded. Last point, in Mumbai we have records to show that since 2015 an average waiting time for a complaint to come up for hearing has been 1.5 to 2 years.