ADR in insurance disputes

Avinash Shankar 10IP60009

Insurance Disputes • Coverage disputes – disputes over whether a given loss or liability is covered by a particular insurance policy. in this case a third party makes a claim against an insured who is indemnified by the insurer .disputes over whether an insured is liable to a third party. the dispute is between the insured and the insurer • Third party disputes -.

Coverage disputes • Coverage disputes are most suited to consensual dispute resolution processes • Helps to preserve and maintain business relationships • Reduces the problem of unfair bargaining which occurs during negotiation by introducing a neutral disinterested third party .

Third party disputes • When dealing with third party disputes it is best to rely on adjudicative process • Avoiding formal litigation of third party disputes is a tactic which insurers use to head off possible class actions. A single dispute can be resolved confidentially .

appoints the insurance ombudsman • Insurance Ombudsmen empowered to entertain complaints on the following aspects – Any partial or total repudiation of claims by an insurer – Any dispute in regard to premium paid or payable in terms of the policy – Any dispute on the legal construction of the policies in so far as such disputes relate to claims – Delay in settlement of claims – Non-issue of any insurance document to customers after receipt of premium .Insurance Ombudsman • The Redressal of Public Grievances Rules 1998 under the Insurance Act 1938 deals with the appointment of Insurance Ombudsman • Governing Body of Insurance Council (GBIC) established under Redressal of Public Grievances Rules.

04. Kochi.2012) the institution has dealt with 13. Kolkata.721 complaints and has given relief of 134. Delhi. Lucknow and Mumbai • In the last thirteen years ( 01.2000 to 31.03. Chennai.Insurance Ombudsman • 12 Ombudsman Centres.2012 .14 Crores to aggrieved claimants • Current complaint disposal rate of 74. covering the country. Bhopal.03. Hyderabad. Bhubaneswar. established in Ahmedabad. Chandigarh. Guwahati.70% as on 31.

• The Complaint is to be made in writing and may be lodged through personal approach or through post / fax / email(followed by hard copy) • No fees / charges are required to be paid .Insurance Ombudsman • In case both parties agree for mediation. he shall pass his award within 3 months. the Ombudsman shall give his Recommendation within 1 month. otherwise.

i. mediclaim insurance.Insurance Ombudsman • Any complainant. whose complaint on the same subject matter is or was before a Court/Consumer Forum cannot approach Ombudsman • The maximum limit for the amount under dispute for which the Ombudsman can entertain a complaint is up to Rs 20 lakhs • Within one year of the rejection by the insurer of the representation of the complainant or the Insurer's final reply to the representation. insurance of personal property ) .e. a policy taken or given in an individual capacity. personal accident insurance. one must the insurance ombudsman • Limited to Insurance on personal lines. ( life insurance.

Alternative dispute resolution (ADR) procedures – used in conjunction with litigation or independently – can significantly reduce the costs and burdens of litigation and result in solutions not available in court .ADR Pledge • Developed by the Centre for Public Resources (CPR) Institute for Dispute Resolution. the pledge promotes the use of ADR • We recognize that for many disputes there may be methods more effective for resolution than traditional litigation.

through confidential negotiation or nonbinding mediation under the auspices of the CPR Insurance Mediation Forum .Insurance Industry Dispute Resolution Commitment • By signing the CPR Insurance Industry Dispute Resolution Commitment an Insurer agrees on behalf of itself and its insurance subsidiaries to attempt to resolve commercial lines coverage disputes with other insurers. with certain exceptions.

• Why ADR? Conclusion – Costs – Speed – Flexibility and customer relationship – Fair proceedings .

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