IRDAI moots inner insurance coverage ombudsman mechanism for complaints in upto ₹50 lakh claims

Insurance coverage regulator IRDAI is proposing an inner ombudsman mechanism in insurance coverage firms to handle complaints involving claims as much as ₹50 lakh.

It’ll relevant to all insurers, besides reinsurers, who’ve been in operation for greater than three years. The target is to arrange an unbiased and neutral evaluation mechanism inside insurers to handle unresolved or escalated complaints in a good, clear and time-bound method, the Insurance coverage Regulatory and Growth Authority of India (IRDAI) stated, putting an publicity draft of the Inner Insurance coverage Ombudsman Tips, 2025, for public session.

Insurers might appoint multiple inner insurance coverage ombudsman, with well-defined jurisdiction, to make sure efficient protection and responsiveness. The draft pointers stipulates eligibility standards, tenure, independence, function and duties and remuneration construction together with normal ideas to be adopted by the interior ombudsman. In direction of robust governance and oversight, it’s proposed that the interior insurance coverage ombudsman will functionally report back to the Board or its Policyholder Safety, Grievance Redressal and Claims Monitoring Committee, with administrative reporting to the MD/CEO.

By institutionalising such an inner however unbiased mechanism, it sought to additional enhance high quality of grievance dealing with and enhancing total shopper confidence within the insurance coverage sector, IRDAI stated. The rules will come into power after three months from the date of problem. The inner ombudsman will think about complaints to which the insurer has not responded inside 30 days of the receipt; or the partly or wholly rejected complaints on which the complainants most well-liked an attraction.

Clients not glad with the choice of the interior ombudsman can inside 30 days, of the choice, desire an attraction earlier than the Insurance coverage Ombudsman.

IRDAI’s proposal represents a big shift in present in-house grievance redressal buildings to a extra unbiased determination governing physique. This can be a progressive step, Bharti AXA Life Insurance coverage MD and CEO Parag Raja stated, welcoming the transfer.

It will additional create a shift from the present grievance administration mechanism to fairer disposal of instances offering prospects another layer to attraction and the insurer a good third-party view. It’ll scale back the burden on the exterior ombudsman. Bharti AXA Life was amongst among the many first few to nominate an inner insurance coverage ombudsman, he stated.