No Insurance Ombudsman in Mumbai for the past 18 months; Consumer Issues Not a Priority?
Mumbai region, which has three to four times of the average insurance complaints handled in an Ombudsman office, has had no full time Ombudsman for the past 18 months. Metros like Mumbai and Delhi get high volume of insurance complaints. Ombudsman from Pune office has been visiting Mumbai office for past seven to eight months to help solve the complaints. With the lack of full time Ombudsman at Mumbai, the grievance redressal machinery has been disrupted and aggrieved parties may have been considerably inconvenienced. Around five years ago, there was no Ombudsman in Ahmedabad for almost a year. So, it is not surprising that number of cases get delayed at Ombudsman level even as number of complaints keep increasing. Consumer issues are not of much priority to the insurance regulator.
The institution of Insurance Ombudsman had been useful in providing remedies to aggrieved insurance policy holders. The Ombudsman office helps in settling matters when there were inordinate delays in courts, including consumer courts. The Ombudsman is an independent office that provides speedy and cost-effective resolution of customers' grievances if the insurance grievance cell of companies have not been able to provide satisfactory response to complaints. 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 Ombudsman working, a long backlog of cases gets built up. Obviously, when consumers file a complaint, they are not given a timeframe in which they can hope to get a hearing or redressal.
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 web page has obviously not been updated. We hope that the process to select the Mumbai Ombudsman will be expedited in the interest of quick resolution of customer grievances.
Earlier, in mid-May 2013, Mr AK Dasgupta took charge of the Mumbai Ombudsman office. It was one of the best periods for Ombudsman. Over one year, the Mumbai Ombudsman resolved more than 1,400 complaints. He invited life and non-life insurance companies to take up simple cases for reconsideration. More than half of the cases were solved without any need of policyholder hearing. Thus, all the old cases (few of 2009-10) were closed and the Ombudsman office started dealing with 2012-13 cases. The Ombudsman office started giving priority to senior citizen cases and those with critical illness. There was a need felt to help these consumer groups faster, so that any unfair claims rejection or partial settlement is given justice.
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 intermediary, while non-life insurance has grievances against third party administrator (TPA) or surveyor. Wrongful denial or partial settlement of claims is a major grouse of policyholders. The other reasons for complaint 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 premium.
Banking Ombudsman Scheme would now include deficiencies arising out of sale of insurance, mutual fund or other third party investment products by banks as well as complaints regarding mobile banking and electronic banking service in the country.
In a recent notification, Reserve Bank of India (RBI) says, “The pecuniary jurisdiction of the Banking Ombudsman to pass an Award has been increased to Rs20 lakh from existing Rs10 lakh. Compensation not exceeding rupees hundred thousand can also be awarded by the Banking Ombudsman to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered by the complainant.”
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