Insurance Ombudsman

Question 1

adjudication

Answer 1

is the legal process by which an arbiter or judge reviews evidence and argumentation including legal reasoning set forth by opposing parties or litigants to come to a decision which determines the rights and obligations of the parties involved.

Question 2

three types of disputes are resolved through adjudication:

Answer 2

1. disputes between private parties, such as individuals or corporations
2. disputes between private parties and public officials
3. disputes between public officails of public bodies.

Question 3

to deal with complaints of the policyholder, the existing system of ombudsman was established under

Answer 3

Redress of Public Grievances Rules, 1998. Enacted by the central government in exercise of Section 114 of the Insurance Act 1938.

Question 4

the 1998 rules shall apply to

Answer 4

All the insurance companies operating in general business and life insurance business.

Question 5

the objects of these rules are to resolve

Answer 5

all complaints relating to the settlement of claims on the part of insurance companies in cost effective, efficient and impartial manner.

Question 6

rule 4 of the 1998 rules provide the legal provisions about the establishment of

Answer 6

‘ombudsman’, who hears the complaints on the insurance matters, and gives award (which is equal to a decree, judgement or order of a court.)

Question 7

the governing body of insurance council shall appoint

Answer 7

one or more persons as ombudsman.
who should have drawn from a wider circle including those who have experience or have been exposed to the industry, civil service, administrative service etc. in addition to those drawn from judicial service.

Question 8

An Ombudsman shall be appointed by the Governing Body from a panel prepared by the committee consisting of

Answer 8

a) Chairman of Insurance Regulatory Authority- Chairman
b) two representatives of the insurance council including one each from the life insurance business and from general insurance business respectively-member
c) one representative of the central government - member.

Question 9

Term

Answer 9

of three years and shall be eligible for re-appointment.

Question 10

No person shall hold office as such Ombudsman

Answer 10

after he has attained the age of 65

Question 11

An Ombudsman may be removed from Service for

Answer 11

Gross misconduct committed by him during his term of office.

Question 12

the Governing Body may appoint such person as it thinks fit to

Answer 12

conduct an enquiry in relation to the misconduct of the ombudsman. All enquiries on misconduct will be sent to the Insurance Regulatory Authority, which may take a decision as to the proposed action to be taken against the Ombudsman.

Question 13

Power of Ombudsman: The Ombudsman may receive and consider-

Answer 13

a) Complaints under rule 13
b) Any partial or total repudiation of claims by an insurer
c) Any dispute in regard to premium paid or payable in terms of the policy
d) Any dispute on the legal construction of the policies in so far as such disputes relate to claims.
e) delay in settlement of claims;
f) Non-issue of any insurance document to customers after receipt of premium.

Question 14

The Ombudsman shall act as

Answer 14

Counselor and Mediator;

Question 15

The ombudsman decision whether the complaint

Answer 15

is fit and proper for being considered or not shall be final.

Question 16

The manner in which complaint is made:

Answer 16

1. Any person or his legal heirs can make a written complaint to the Ombudsman.
2. The Complaint shall be:
   a. in Writing
   b. duly signed by the complainant;
   c. State clearly the name and address of the complainant
   d. the name of the branch or office of the insurer;
   e. documents to support the complaint
   f. nature and extent of loss
   g. the relief sought from the ombudsman

Question 17

No complaint to the ombudsman shall lie unless:

Answer 17

(a) the complainants had before making a complaint to the Ombudsman made a written representation to the insurer named in the complaint and either insurer had rejected the complaint or the complainant had not received any reply within a period of one month after the insurer concerned received his representation or the complainant is not satisfied with the reply given to him by the insurer.
(b) the complaint is made not later than one year after the insurer had rejected the representation or sent his final reply on the representation of the complainant; and
(c) the complaint is not on the same subject matter, for which any proceedings before any court, or Consumer Forum, or arbitrator is pending or were so earlier.

Question 18

Recommendations made by the Ombudsman:

Answer 18

(1) When a complaint is settled, through the mediation of the Ombudsman, undertaken by him in pursuance of request made in writing by complainant and insurer through mutual agreement, the Ombudsman shall make a recommendation which he thinks fair in the circumstances of the case. The copies of the recommendation shall be sent to the complainant and the insurance company concerned. Such recommendation shall be made not later than one month from the date of the receipt of the complaint.
(2) If a complainant accepts the recommendation of the Ombudsman, he will send a communication in writing within 15 days of the date of receipt of the recommendation. He will confirm his acceptance to Ombudsman and state clearly that the settlement reached is acceptable to him, in totally, in terms of recommendations made by the Ombudsman in full and final settlement of complaint.
(3) The Ombudsman shall send to the insurance company a copy of the recommendation along with the acceptance letter received from the complainant. The insurer shall thereupon comply with the terms of the recommendations immediately not later than 15 days of the receipt of such recommendation and the insurer shall inform the Ombudsman of its compliance.

Question 19

Award:

Answer 19

(1) Where the complaint is not settled by agreement under Rule 15, the Ombudsman shall pass an award, which he thinks fair in the facts and circumstances of a claim.
(2) An award shall be in writing and shall state the amount awarded to the complainant: Provided that Ombudsman shall not award any compensation in excess of which is necessary to cover the loss suffered by the complainant as a direct consequence of the insured peril, or for an amount not exceeding rupees twenty lakhs (including ex-gratia and other expenses), whichever is lower.
(3) The Ombudsman shall pass an award within a period of three months from the receipt of the complaint.
(4) A copy of the award shall be sent to the complainant and the insurer named in the complaint.
(5) The complainant shall furnish to the insurer within a period of one month from the date of receipt of the award, a letter of acceptance that the award is in full and final settlement of his claim.
(6) The insurer shall comply with the award within 15 days of the receipt of the acceptance letter under sub-rule (5) and it shall intimate the compliance to the Ombudsman.

Question 20

consequences of non-acceptance of award:

Answer 20

If the complainant does not intimate the acceptance under sub-rule (5) of rule 16, the award may not be implemented by the insurance company.

Question 21

Power to make Ex-gratia payment.:

Answer 21

If the Ombudsman deems fit, he may award an Ex-gratia payment.