Insurance companies in the country are often seen to completely bypass the judgments passed by ombudsmen with regard to resolving policyholders’ complaints and grievances. As per the regulations of the insurance ombudsman, insurance companies have to compulsorily adhere to the awards passed by the former within 30 days from the receipt of the same. Yet, the true scenario on the ground is drastically dissimilar.
Many insurance companies are not adhering to these awards passed by ombudsmen and are not filling appeals also within a period of 60 days from receiving the same as per the regulations. This has been confirmed by IRDAI senior officials including the General Manager for Consumer Affairs, TS Naik. The reasons for not executing every individual award have to be mentioned and clarified to the regulator during statement submission. This is not being done by several insurers as of now.
Not complying with the awards or judgments passed by the ombudsman is an issue that was first highlighted upon analysis and scrutiny of information garnered from insurance companies for the period between April and December last year. Keeping the seriousness of the ground situation at the forefront, IRDAI has warned all insurance entities over not complying with the rules and not providing data. Not submitting the statements based on prescribed guidelines and not complying with insurance awards within specific time periods will be something taken extremely seriously as per the IRDAI official release.
The system of the ombudsman runs parallel to the online complaint framework established by IRDAI. In 2017-18 fiscal, ombudsmen had got 25,478 complaints in all, out of which 52% covered life insurance. They covered 17,225 complaints and 13% of complaints came with awards that were issued for execution to insurance companies. 10,583 complaints remained pending as of March 2018 according to reports. The core problem is now the non-execution of these regulations and awards by the insurance companies. This is rendering ombudsmen non-functional when it comes to redressal of customer grievances. The ombudsman for insurance was set up by the Indian Government in the year 1998.
As per reports, the complaint count in the life insurance segment increased by a whopping 28% in the 2017-18 period with 154,367 complaints as compared to 120,847 complaints that were received in the 2016-17 period. However, complaint volumes did reduce by a decent 16% in the general insurance category.
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