MODULE 15

Grievance Redressal Procedure available to Policyholders

Learning Outcomes:-

a) Procedure to be followed for grievance redressal

b) Insurance Ombudsman
c) IGMs of IRDA
d) Other avenues

1. Procedure to be followed for grievance redressal

Every Insurance company has procedures and mechanism to handle complaints and
grievances of policyholders. The grievance redressal procedure is communicated to the
policyholder in the policy document.

Authority, Designated by the Insurer – In the event of, the policyholder getting
aggrieved by any decision taken by the insurer in settlement of claims or disputes
related to deficiency of service, she may approach the Grievance Redressal Authority
of the insurer. The department handling customers’ complaint is called Grievance Cell. It
is handled by a senior official of the insurance company and is at Regional/Zonal
/Corporate level. Every office of the insurance company has a officer nominated for
handling client’s complaints and his name and designation is displayed at a prominent
place in the office.

On receipt of a complaint, the Grievance Cell has to :

i) Record the complaint maintained for the purpose. Allot a complaint number,
ii) Complainant’s letter should be acknowledged providing the reference
number allotted to his complaint.
iii) The Cell calls for the file, papers and information relating to complaint from
the relevant office.
iv) The Cell examines genuineness of the complaint and give it’s decision within
one month, and communicates and to the complainant.

2. Insurance ombudsman.

Insurance Ombudsman is an authority which is created by Central Government for a

State/ States under “Redressal of Public Grievances Rules 1998.

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The contact details of the Ombudsman are available in the policy document.

2.1 Before making complaint to The Ombudsman, the insured must write to the insurer
(grievance cell) and only on rejection/ non reply for 30 days he can approach
Ombudsman.

2.2 The time limit for making complaint to the Ombudsman is one year from the date of
cause of action.

2.2 Ombudsman can be approached only for personal line of insurance policies. [Health,
Motor, Fire, Personal Accident Insurance etc.]

2.3 Subject matters of complaints can be claims- repudiation, delay, and amount.
Complaints regarding non-issuance or delayed issuance of policy and interpretation of
clauses can also be made to the Ombudsman.

Any other matter, if both the parties to dispute agree, the Ombudsman can act as
mediator.

Insurance company cannot appeal against the order of Ombudsman.Policyholder may

ignore the award and go to the court, consumer forum etc., if he consents the insurer is
bound to accept the award.

2.4 Award

Maximum award can be the amount of loss only.

Jurisdiction of the Insurance Ombudsman is up to the amount of Rs. 20 lacs.

The Ombudsman may award ex gratia payment.

3. Integrated Grievance Management System of IRDA

The Integrated Grievance Management System facilitates online registration of

policyholders’ complaints and helps track their status.

A policyholder can make use of this system by giving accurate information about the
complaint like the policy number, name of the insurer, complainant’s contact details etc.

The Complaint Registration Process involves the following TWO SIMPLE steps

Step 1: Register by entering complainants credentials

Step 2: Use Registered credentials to register complaints and view their status

Complaints need to be made first to the Insurance company. If there is no response or

the policyholder is not satisfied with the response, policyholder can register his
complaint with IRDA.

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For registering the complaint, complainant can visit
http://www.igms.irda.gov.in/

IRDA follows them with the Insurance company, till the matter is resolved as per
laws and rules.

4. Other avenues

4.1 Policyholder can o file an application against the insurer in case of any complaint,
under Consumer Protection Act 1986.

The Act covers deficiency in service for goods sold and services rendered.

The Act applies to all goods and services unless exempted by Central Govt. It covers all
sectors whether private, public or co- operative.

The Act deals with the following matters:

i) Repudiation of claims
ii) Delay in settlement of claims
iii) Delay in finalising the claim

The complaint should be on plain paper and should be submitted in 3 copies. Nominal
fees are payable. Complaint can be sent by post also.

There is no need of engaging any lawyer. The policyholder himself can appear before
the forum.

The time limit for filing the complaint the time limit is 2 years from the cause of action

Jurisdiction:-

i) District forum: - upto Rs.20 lacs .

ii) State commission: up to Rs. 1 crore.
iii) National commission: Above Rs. 1 crore.
iv) Appeal lies to higher forum- within 30 days of the award. In case of National
Commission, the appeal lies with the Supreme Court of India

4.2 CIVIL CORTS

Case can also be filed in court of law against the insurance company within 3 years.
However it takes a long time for settlement and is expensive as court fees and lawyer’s
fees are very high.

4.2.1 Supply of copies of proposal and medical reports

Every insurer carrying on life insurance business is under an obligation to supply to the
policyholder certified copies of the questions put to him and his answers thereto
contained in his proposal for insurers and in the medical report supplied in connection
therewith.

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4.2.2 Notice to be given of the options on the lapsing of the policy

Every insurer carrying on life insurance business is required to give notice to the holder
of life insurance policy before expiry of three months from the date on which the
premium in respect of a policy of life insurance were payable but not paid, informing
him of the options available unless these are set forth in the policy.

The notice given by the life insurer is certainly a notice given prior to the lapsing of the
policy and in fact protects the interests of the policy holders. But the provisions of this
section do not mentioned of this notice if the options available to the assured on the
lapsing of the policy are set forth in the policy. It is suggested that even if the policy
details about options, such a notice is required because life insurance policies are long
term policies and in the ordinary course of business. These options are seldom noticed
by the policy holder. Hence the words “unless these are set forth in a policy” may be
omitted, which would make the notice requirement unconditional.