“Both of my claims were dismissed within a year. The Ombudsman ruled in my favor on the first claim, but when they discovered that a company had helped me on the first claim, they did not My case was heard and a verdict was passed against me in the second claim,” Garg said.
Garg’s situation highlights major challenges facing the system. While the policyholder and insurance company have an opportunity to present their case, neither party can retain an attorney or any other third party.
For most policyholders, going through this process can be daunting. After an insurance company denies a claim, the first step for a policyholder is to contact the insurance company’s grievance handling department. If the problem remains unresolved, they can contact the Ombudsman. Hearing dates are fixed (online or in person) and both sides present their arguments.
No level playing field
There is no fee to lodge a complaint with the Insurance Ombudsman. It is a cost effective system with claims up to $5 million can be solved faster. However, people who are unaware of its existence or understanding of the process sometimes turn to third parties for support. Ombudsman officials generally do not have access to this matter, but if they did, they might view it in a negative light.
Several complainants told Mint They were asked to write a letter stating that they would not pay any third party. Mint I’ve seen one like this.
“I have been told that my case is genuine but I still cannot get my claim because I am seeking help from the agency to file a case with the Ombudsman. I have a full time job. My husband is experiencing health issues. I do not know if I seek Why is it wrong to have someone help with paperwork to ease my mental burden? said one person, who asked not to be named because her case is pending in the Consumer Court.
Consumer policy expert Bejon Misra, a member of the Insurance Ombudsman’s advisory committee, highlighted the lack of a level playing field between insurers and policyholders.
“Insurers may not send lawyers to the ombudsman’s office, but the people who represent them before the ombudsman have extensive insurance backgrounds, have access to the company’s expert lawyers, or have a legal background. It’s a common person versus a big A battle between entities. If a complainant seeks support from an insurance expert, you cannot challenge it. In fact, Irdai (Insurance Regulatory and Development Authority of India) should allow representation if the complainant wants to,” he said.
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What did the ombudsman say?
Ombudsman officials fear this will undermine the free nature of the system. RM Singh, insurance ombudsman for Madhya Pradesh and Chhattisgarh, who retired in November, said: “The ombudsman officials are impartial and they understand that policyholders cannot present their case as structurally as insurance companies.”
“People should rely on them. Most complaints made to the Ombudsman will go in favor of the complainant. In recent times, it has been observed that small agencies have sprung up charging policyholders to assist them. This practice should not be encouraged because otherwise it will become part of the process, and gullible policyholders may be defrauded by unscrupulous players.
Policyholder Arjun Singh trusted the system and contacted the ombudsman officer at his location. But he was disappointed.
“It was clear that the ombudsman officer was biased against the insurance company’s representatives. The head of the ombudsman insulted me and did not let me speak. There was too much paperwork between the insurance company and the ombudsman in order to get my claim, ” Singer said.
Milind A. Kharat, a former insurance ombudsman in Mumbai and Goa, said the insurance ombudsman aims to resolve insurance complaints quickly and at no cost to the complainant. Consumer Court involves legal costs such as solicitors’ fees and stamp duty, but can still cause delays in resolution.
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What about non-legal aid?
Insurance Brokers Association of India president Sumit Bohra said brokers should at least be allowed to represent their clients. “When our customers have problems with claims, we raise the matter with the regulator. If we want to ensure that illegal actors do not defraud policyholders, regulators should recognize some entities that can provide this kind of support.” They seek the word,” Borah said.
There are 17 ombudsman offices in India. The data shows that in the 2023-24 financial year, they resolved 49,705 complaints, of which 16% were in favor of the complainant, 15% in favor of the company, 6% of complaints were withdrawn, 23% were unacceptable and 27% were recommendations, Also called mediation.
“In this regard, the Ombudsman made a fair recommendation to the complainant. If he accepted it, it was forwarded to the insurance company for compliance. In this case, no actual hearing with the complainant and the insurance company was required, So even it can be resolved quickly either in favor of the complaint or the insurance company, or it falls by the wayside,” Karat said.
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The data shows that in fiscal year 2024, 67.40% of complaints, including adjudication and mediation, were decided in favor of the complainant.
A detailed analysis revealed that Mumbai, Bengaluru and Jaipur were the states from which the complainants received the highest compensation. Delhi ranked lowest in this regard, with only 53 rulings in favor of complainants, compared with 612 rulings by insurance companies.
In terms of costs, the average expenditure of the Office of the Ombudsman $Each complaint handles 12,000 complaints, more than double the previous number. The Board of Insurance Ombudsmen collects funds from insurance companies based on their turnover. Misra suggested that the cost of handling complaints should be recovered directly from the insurance company against which the complaint was made. “This will enable insurance companies to eventually resolve complaints without policyholders having to contact the ombudsman in the first place,” Misra said.
Ajit Kumar in Kerala faces different challenges. He lodged a complaint against the online brokerage platform with the ombudsman, but they did not accept it. “They told me they needed records of my communications with the grievance officer of the brokerage platform. There is no such officer at the brokerage platform. I received emails from the CEO, but the ombudsman’s office kept asking for records of my communications with the grievance officer,” he said .
To be sure, brokers have only recently been brought under the umbrella of ombudsmen, but most do not have designated grievance officers like insurance companies do.
“If the broker concerned does not have a grievance officer, the Ombudsman should accept the complaint of Ajit Kumar and accept the statement of claim denial from any claims officer of the broker concerned. However, Irdai should make it mandatory for the brokerage houses to have a designated grievance officer so that operations remain Symmetry, otherwise decisions will be based on the views of each inspector,” said RM Singh.
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