INTRODUCTION
Insurance is a contract of indemnity, intended to compensate the insured for losses. Disputes over such contracts are common, and due to the dominant position of, insurers those differences often go unheard. To protect the rights of insured consumers, effective redressal mechanisms were introduced by the Government of India. These mechanisms apply not only to traditional insurance but also to insurtech. The rise of digital technology brought fintech into insurance, giving rise to the sector known as insurtech. Despite the digital process, there’s no distinction in the redressal mechanism between normal insurance and insurtech.
GRIEVANCE REDRESSAL MECHANISM
- Policy issuing office
- Grievance Redressal Officer (GRO)
- Integrated Grievance Management System (IGMS)
- Insurance Ombudsman
- Consumer commission
Policy Issuing Office: If the insured individual has any complaints regarding policy servicing, they can address them by submitting a written grievance to either the Policy issuing office or the regional office for resolution. This is the first stage of the grievance redressal mechanism in insurance and works like a negotiation process.
Grievance Redressal Officer: If you, as an insured person, are not satisfied with the resolution of your complaint through the aforementioned methods, you can reach out to the Grievance Redressal Officer using the contact details provided on the official website of your respective Insurer. The complainant has to submit the complaint in writing, accompanied by the necessary supporting documents. And request a written acknowledgment of your complaint with the date of submission. The insurance company is obligated to resolve your complaint within two weeks from the date of receipt. Visit IRDAI’s official website to avail the combined contact information of GROs of all insurance companies in India.
Integrated Grievance Management System (IGMS): If the issue remains unresolved after two weeks or if the Grievance Officer’s response is not satisfactory, you can file a complaint within the integrated Grievance Management System (GMS) of the IRDAI. In any of the following modes:
- Register complaints directly in IRDAI’s online Bimabharosa System.
- Send complaint through email – complaints@irdai.gov.in
- Complaint via call- 155255 (or) 1800 4254 732
- Communication in physical form with the General manager of PPGRD
After the registration of a complaint in the Bima Bharosa System, the complaint details are forwarded to the relevant insurance companies. The policyholder is then sent a confirmation email containing an IRDAI token number, which enables them to track the progress of their complaint within the Bima Bharosa System. If the complainant deems it necessary to send the communication in a physical form instead of the options mentioned above, they may address it to the General Manager of Policyholder’s Protection & Grievance Redressal Department – Grievance Redressal Cell, IRDAI by sending it via post or courier. A separate complaint registration form is required for each complaint. No two complaint is encouraged under a single form and IRDAI cannot register the complaint without the necessary information requested in the Complaint Registration Form.[1]
Insurance Ombudsman: The grievance remains unresolved even after approaching GRO, the policyholder can seek redress from the insurance Ombudsman, authorized under The Insurance Ombudsman Rules, 2017. There are 17 Ombudsman Centers located across the country in the following cities Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kochi, Kolkata, Lucknow, Mumbai, Noida, Pune, and Patna.[2] The Council for Insurance Ombudsmen (CIO) oversees the Offices of Insurance Ombudsman, which were established under the Insurance Ombudsman Rules. These offices perform as an alternative platform for addressing the grievances of policyholders concerning personal insurance policies, group insurance policies, policies issued to sole proprietorships, and micro enterprises. Their objective is to resolve complaints impartially and cost-effectively. The policyholder could file a complaint physically or via post (email facility also available) to the Ombudsman having jurisdiction over your respective claim. Otherwise, the official website of the Council for Insurance Ombudsman could be used to raise digital complaints before the Insurance Ombudsman. These Ombudsmen are empowered to receive and evaluate complaints alleging inadequate performance by insurers, including their agents and intermediaries. Such complaints may be based on various grounds as follows:
- Delay in settlement of claims.
- Any partial or total repudiation of claims by the life insurer, general insurer, or health insurer.
- Premium disputes were paid or payable in terms of the insurance policy.
- Misrepresentation of policy terms and conditions at any time in the policy document or policy contract.
- The legal construction of insurance policies in so far as the dispute relates to the claim.
- Policy servicing related grievances against insurers and their agents and intermediaries.
- Issuance of life insurance policy, general insurance policy including health insurance policy which is not in conformity with the proposal form submitted by the proposer.
- Non-issuance of insurance policy after receipt of premium in life insurance and general insurance including health insurance.
- Any other matter arising from non-observance of or non-adherence to the provisions of any regulations made by the Authority (IRDAI) concerning the protection of policyholders’ interests or regulations, instructions, or guidelines issued by the IRDAI or of the terms and conditions of the policy contract, insofar as such matter relates to issues referred to the above clauses.[3]
Conditions
1. The complaint can be made to the Insurance Ombudsman within one year in either of the following situations:
a. When the Insurance Company/Insurance Broker rejects the complaint.
b. When one month has passed since filing the complaint and the Insurer has not responded.[4]
2. The requested compensation amount in the Insurance Ombudsman complaint should not exceed Rs.30 Lakhs.[5]
Consumer Protection: The amendment to the Consumer Protection Act, 2019 expanded the definition of “consumer” to encompass individuals who purchase goods or services in exchange for money, excluding commodities or services sold for profit.[6] This broader classification now extends to a wider range of customers, including those within the insurance industry. As a result, policyholders are empowered to seek redressal before the three-tier quasi-judicial mechanism provided under the Consumer Protection Act, 2019 namely district commissions, state commissions, and national commissions. As per the pecuniary jurisdiction provided:
- 50 lakhs for District Commissions.[7]
- More than ₹50 lakhs to ₹2 Crore for State Commissions.[8]
- More than ₹2 Crore for National Commission.[9]
CONCLUSION
Policyholders having differences with the insurer may utilize any of the aforementioned grievance redressal mechanisms as to their preference. The first two steps are mandatory before proceeding to any of the subsequent 3 steps. The Integrated Grievance Management System (IGMS), the Insurance Ombudsman, and Consumer Commissions are controlled by three distinct legislative frameworks and so can’t be pursued simultaneously. Among these three redressal mechanisms, IGMS appears to be simple and effective. This is because the Ombudsman lacks jurisdiction over disputes exceeding 30 lakhs, and the Consumer Commission, resembling a court, is burdened with numerous cases that could result in lengthy case resolution times. Therefore approaching IGMS will help insured to avail speedy and appropriate redressal with no cost.
Author(s) Name: Sridhar L (TNDALU, Chennai)
References:
[1] ‘Grievance Redressal Mechanisms’ (IRDAI) <https://irdai.gov.in/grievance-redressal-mechanism1> accessed 07 August 2023
[2] ‘List of Insurance Ombudsmen’ (Life Insurance Council, 6 June 2016) <https://www.lifeinscouncil.org/consumers/ListOfInsuranceOmbudsmen> accessed 07 August 2023
[3] Insurance Ombudsman rules 2017, r 13
[4] Insurance Ombudsman Rules 2017, r 14
[5] Insurance Ombudsman rules 2017, r 17
[6] Consumer Protection Act 2019, s 2(7)
[7] Consumer Protection (Jurisdiction of the District Commission, the State Commission, and the National Commission) Rules 2021, r 3
[8] Consumer Protection (Jurisdiction of the District Commission, the State Commission, and the National Commission) Rules 2021, r 4
[9] Consumer Protection (Jurisdiction of the District Commission, the State Commission, and the National Commission) Rules 2021, r 5
