Banking and Insurance
Dr. Ruchi Jain
Week 7_A2
Week 7: Additional Reading 2
Insurance Ombudsman Scheme
Insurance Ombudsman Scheme
Overview:
The Government of India has established the Insurance Ombudsman scheme to facilitate the
resolution of complaints from individual policyholders against insurance companies. This
framework offers an efficient, cost-effective, and impartial alternative to the conventional court
proceedings for dispute resolution.
Insurance Ombudsman Distribution and Accessibility:
Presently, India hosts 17 Insurance Ombudsmen in various locations. Individuals possessing
grievances against insurance providers may submit their complaints in writing to the Insurance
Ombudsman within whose territorial jurisdiction either the branch office of the concerned
insurer or the complainant's residence is located.
Criteria for Approaching the Ombudsman:
The Ombudsman can be approached under the following conditions:
• The complainant must have already communicated the issue to the insurance company,
which has either rejected it, failed to resolve it satisfactorily, or not responded within
30 days.
• The complaint must be related to a policy taken in the complainant's capacity as an
individual, and the value of the claim, including expenses, should not exceed Rs 30
lakhs.
Permissible Complaints:
Complaints can encompass issues such as:
• Delays in the settlement of claims beyond the specified regulatory timeframe.
• Partial or total refusal of claims by the insurer.
• Disputes concerning the premiums paid or payable as detailed in the insurance policy.
© All Rights Reserved. This document has been authored byDr.Ruchi Jain and is permitted for use only within the course "Banking and
Insurance” delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data, illustrations, pictures,
scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying,
recording or otherwise – without the prior permission of the author.
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Banking and Insurance
Dr. Ruchi Jain
Week 7_A2
• Misrepresentation of policy terms and conditions.
• Questions regarding the legal interpretation of insurance policies as they pertain to
claims.
• Complaints about the handling of policies by insurers and their agents or intermediaries.
• Discrepancies between the issued policy and the proposal form submitted by the
proposer.
• Non-issuance of a policy after the premium has been received.
• Any other matters resulting from non-compliance with the Insurance Act, 1938, or
IRDAI's regulations, guidelines, or the terms and conditions of the policy contract,
particularly concerning issues outlined in the previous points.
Dispute Resolution Process:
• Mediation and Recommendation:
Initially, the Ombudsman acts as a mediator to formulate a fair recommendation based on the
dispute facts. If this recommendation is accepted as a full and final settlement, the Ombudsman
will instruct the insurance company to comply with the terms within 15 days.
• Issuance of Award:
Should mediation not result in a resolution, the Ombudsman will issue an award within three
months of receiving all necessary documentation from the complainant. This award is
obligatory for the insurance company to follow.
• Compliance with the Award:
Upon issuance, the insurance company is required to comply with the award within 30 days
and confirm its adherence to the Ombudsman.
Reference:
• https://policyholder.gov.in/ombudsman
© All Rights Reserved. This document has been authored byDr.Ruchi Jain and is permitted for use only within the course "Banking and
Insurance” delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data, illustrations, pictures,
scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying,
recording or otherwise – without the prior permission of the author.
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