Insurance Lokpal: Insurance claim rejected? Don't worry, 'Bima Lokpal' will provide justice..
Insurance Ombudsman: If your life insurance or health insurance company has rejected your claim without a valid reason or is deliberately delaying payment, you don't need to worry. Now you can directly file your complaint with the Insurance Ombudsman and get justice without any cost.
What is the Insurance Ombudsman?
The Insurance Ombudsman is an independent body that resolves disputes between insurance customers and insurance companies. Its objective is to ensure customers receive a speedy and fair resolution without the hassle of court proceedings.
When can you file a complaint with the Insurance Ombudsman?
You can only approach the Insurance Ombudsman if your complaint is up to ₹50 lakh. If your claim amount exceeds this amount, you will need to resort to a court or consumer forum. Importantly, you must first file a complaint with your insurance company and give them 30 days to respond.
If the company does not respond or you are not satisfied with the response, you can approach the Insurance Ombudsman within one year from the date of the claim rejection. However, complaints will not be accepted after more than one year.
In what cases can you complain?
Unreasonable delay in claim settlement (more than 15 days)
Full or partial rejection of the claim by the insurance company
Dispute regarding the premium amount
Incorrect information or misinterpretation of the insurance policy
Complaints related to policy servicing (negligence by agents or brokers)
Failure to issue a policy in accordance with the insurance proposal
Failure to issue a policy even after receiving the premium
Violation of IRDAI regulations or neglect of customer interests
How to complain, what documents are required?
According to Anita Teli, Chief Compliance Officer of Probus Insurance, before approaching the Insurance Ombudsman, the customer should file a formal complaint with the insurance company. If the issue is not resolved within one month, they can approach the Ombudsman.
These documents are required with the complaint:
A complaint letter was sent to the insurance company or broker
KYC documents (Aadhaar, PAN, driving license, etc.)
Response or rejection letter from the insurance company
Copy of the insurance policy
All medical records or evidence related to the claim
Passport-size photo if filing an online complaint
How many days does it take to get a decision?
The Insurance Ombudsman aims to resolve complaints within 60 to 90 days. If both parties (the customer and insurance company) agree to mediation, the matter can be resolved within 30 days.
According to the Council of Insurance Ombudsman's annual report for 2023-24, a total of 56,907 complaints were received. Of these, 29,506 complaints were resolved within 30 days, and approximately 11,419 complaints were resolved within 60 days. If mediation is unsuccessful, the Ombudsman issues an “award” or recommendation within 3 months.
Is the insurance company obligated to comply with the Ombudsman’s order?
Yes, absolutely. Under the Insurance Ombudsman Rules, 2017, the insurance company is required to implement the Ombudsman’s order within 30 days. Failure to do so results in a penalty of ₹5,000 per day.
However, this penalty is not directed to the customer but to the “Policyholders’ Protection Fund.” Therefore, if the company does not comply, the customer can seek recourse to the Consumer Forum.
Sometimes, insurance companies retaliate.
In some cases, insurance companies initiate criminal proceedings even after the Ombudsman’s order. They may file cases under sections such as IPC 420 (cheating), IPC 468/471 (forgery), or IPC 120B (criminal conspiracy). However, the Supreme Court has stated that if the matter is merely an insurance dispute and there is no criminal element, the court should exercise caution in such cases to prevent misuse of the law.
Why is an Insurance Ombudsman Necessary?
It holds insurance companies accountable.
It provides relief to customers from the hassles of court proceedings.
It provides free and fair settlement.
It increases transparency in the insurance sector.
It builds customer trust.
Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
