As per several reports and studies that tracked complaints received by the insurance ombudsman in the life category, mis-selling of insurance policies accounts for the majority of complaints. In the non-life segment, however rejections of claims on pre-existing ailment grounds forms the primary reason for most disputes.

Mis-selling is often carried out through forging of the signature of the proposer on insurance policy forms or even through selling long-term insurance plans although proposers do not have the means to maintain these policies. IRDAI has made it compulsory for insurance companies to follow up accordingly through verification calls. However, reports state that intermediaries, namely agents and brokers, have been teaching their customers to simply accept all the terms and conditions.

The ECOI (Executive Council of Insurers) annual report has clearly indicated how mis-selling is the key reason behind most complaints in the life category. Post the rule amendment implemented in 2017, ombudsmen can easily pass orders against insurance companies and intermediaries. This essentially means that orders can be issued against banks but insurance companies will have responsibility since its representatives are the agents themselves as per the insurance ombudsman for Mumbai and Goa, Milind Kharat.

Kharat has also stated that the office of the ombudsman is the best forum for the redressal of all such complaints from customers since there are no fees charged and no need for any lawyer. Complaints can also be registered through emails. Awards for mis-selling were restricted to premium refunds since ombudsman’s offices cannot impose any penalties. Another restriction is that the maximum award that can be issued, which is Rs. 30 lakh. In case of health insurance, one of the commonest reasons for complaints is rejection of claims on the grounds that expenditures did not come under customary and reasonable charges. Since reasonable makes for subjective word, it may differ across the country.

Insurance companies often reject claims made for buying high-priced lenses for cataract operations for instance. However, there is no clear underlining of the fact that multi-focal lenses are not covered in cataract treatments as far as the terms and conditions of such policies are concerned according to this report.

The list of grievances can be summed up below:

In case you too are a victim of mis-selling; you can reach out to Insurance Samadhan for expert advise and resolution.