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Insurance companies are ignoring the implementation of judgments given by ombudsmen in resolution of complaints from policyholders.
According to insurance ombudsman regulations, it is mandatory for insurers to comply with the awards passed by the ombudsman within a period of 30 days from the receipt of the award. However, the reality is different.
Many insurers are neither complying with the awards nor filing appeals within 60 days of receipt of awards in accordance with the provisions, according to TS Naik, General Manager, Consumer Affairs, IRDAI. While submitting the statement to the regulator, the reasons for non-execution of each award have to be mentioned separately, which is not being adhered to by many players in the industry.
The non-compliance with ombudsman awards (judgments) came to the fore during the examination of data received from insurers for the April 2018 to December 2018 period.
Keeping the gravity of the situation in mind, the IRDAI has cautioned all insurance companies over non-compliance and non-submission of data.
“Non-submission of statements prescribed norms (with reference to ombudsman regulations), and on-compliance of awards by insurers within the timelines prescribed, will be viewed very seriously,” it said in a circular sent to insurers.
Complaints
The ombudsman system is parallel to the regulator’s web-managed complaint system.
During 2017-18, 17 ombudsmen spread across the country, had received a total of 25,478 complaints, of which, 52 per cent were related to life insurance. Of these, they disposed of 17,225 complaints – 13 per cent of the complaints had awards issued to the insurers for implementation. As on March last year, 10,583 complaints were pending.
The issue now is the non-implementation of the decisions by the insurers, which is making the whole system of insurance ombudsmen ineffective. The institution of insurance ombudsman was created by the Government of India in 1998.
The data of integrated grievance management system, put in place by the regulator as a portal, is also interesting.
There has been a surge in the number of complaints in life insurance. The number of complaints reported in the life insurance sector went up by 28 per cent in 2017-18 at 154,367 against 120,847 in 2016-17, as per IRDAI data in the annual report for 2017-18, which was released two months ago. In general insurance, there was a 16 per cent reduction in the number of complaints.
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