Central Government by notification, has framed the Redressal of Public Grievances Rules, 1998. These rules apply to Life and General Insurance in respect of Personal Line Insurance i..e-insurance taken in an individual capacity. 

The Ombudsman may receive and consider complaints in respect of:-

• Any partial or total repudiation of claims by an insurer.
• Any dispute in regard to premium paid or payable in terms of the policy.
• Any dispute on the legal construction of the policies in so far as such disputes relate to claims.’
• Delay in settlement of the claims.
• Non-issuance of any insurance documents to customers after receipt of premium.

No Complaints to the Ombudsman shall lie unless:-

• The complainant had made a previously written representation to the insurer and the insurer had
• Rejected the complaint or
• The complainant had not received any reply within one month after receipt of the complaint by the insurer, or
• The complainants are not satisfied with the reply given by the insurer.
• The complaint is made not later than one year after the insurer had rejected the representation.
• The complaint is not pending in any court or consumer forum or in arbitration.

Appointment of Ombudsman:

The rules state the following in regard to the appointment of Ombudsman:

• One or more persons may be appointed as Ombudsman.
• Selection will be from an eminent group of persons who have experience in the industry.
• Civil Service, Administrative Service, Judicial Service etc.
• The Governing Body of Insurance Council appoints an ombudsman.
• An initial appointment is for 3 years but re-appointment is allowed.

The Powers of Ombudsman:

The Ombudsman is authorised to deal with:-

1. Claim disputes including delays and refusals.
2. Disputes regarding premiums payable.
3. Disputes regarding legal aspects of policies.
4. The non-issue of insurance documents after receipt of premium.

Complaint Procedure.

Any complaint must be made within one year of the complaint being rejected by the insurance company (especially where the insurer has either rejected the complaint or has not replied within 1 month of receiving the complaint). It should be in writing and signed by the person making the complaint giving his / her name and address and the branch office and address of the insurer against whom the complaint is made.  The ombudsman can entertain complaints from the individual policy holders only.

The ombudsman shall act as a counsel and mediator in matters within its terms of reference.  It is not the judicial authority and has no night to summon any witness. The complainant and Insurer can make the personal submission but lawyers are not permitted to argue the case.

Once the ombudsman has received a complaint, a recommendation within one month from the date of receipt must be made.  The person making the complaint has 15 days from receipt of the ombudsman recommendation to accept the terms.  Once the person making the complaint has agreed to the terms, the ombudsman will send a copy of the recommendation and acceptance to the insurer.  The insurer then has 15 days to comply with the terms agreed.

If a complaint is not settled by agreement, as above, the ombudsman passes an award he thinks is fair under the circumstances.  The award must be passed within 3 months of receipt of the original complaint.

On receipt of the Ombudsman’s award, the person who has complained will have to inform that he is accepting the award, otherwise, the Insurance Company may not implement the award.

The maximum award that can be made by the Ombudsman is Rs.20,00,000/-

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