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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; the dispute is between the insured and the insurer Third party disputes -- disputes over whether an insured is liable to a third party; in this case a third party makes a claim against an insured who is indemnified by the insurer

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

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, 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
12 Ombudsman Centres, covering the country, established in Ahmedabad, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Kochi, Kolkata, Lucknow and Mumbai In the last thirteen years ( 01.04.2000 to 31.03.2012) the institution has dealt with 13,721 complaints and has given relief of 134.14 Crores to aggrieved claimants Current complaint disposal rate of 74.70% as on 31.03.2012

Insurance Ombudsman
In case both parties agree for mediation, the Ombudsman shall give his Recommendation within 1 month, otherwise, he shall pass his award within 3 months.

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
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, one must the insurance ombudsman Limited to Insurance on personal lines; i.e. a policy taken or given in an individual capacity, ( life insurance, personal accident insurance, mediclaim insurance, insurance of personal property )

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. 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

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, through confidential negotiation or nonbinding mediation under the auspices of the CPR Insurance Mediation Forum

Why ADR?


Costs Speed Flexibility and customer relationship Fair proceedings