K.

SRIDHAR
INSURANCE OMBUDSMAN
 INTRINSIC CHARACTERISTICS
OF INSURANCE CONTRACTS
DIFFER FROM OTHER
CONTRACTS

INSURANCE IS STILL SOLD AND

NOT BOUGHT
PRODUCTS NOT TANGIBLE ONLY
PROMISES
AFTER SALES SERVICE
INTRINSIC CHARACTERISTICS OF
INSURANCE CONTRACTS
DIFFER FROM OTHER
CONTRACTS

LEVEL OF KNOWLEDGE OF
INSURED/NOMINEE
LAWS OF LAND
LAWS OF CONTRACT
LAWS OF INSURANCE
 INTRINSIC CHARACTERISTICS OF
INSURANCE CONTRACTS DIFFER
FROM OTHER CONTRACTS

CRUCIAL ROLE PLAYED BY

INTERMEDIARIES
AGENTS INCLUDING
BROKERS/CORPORATE AGENTS
SALES TEAM
MEDICAL EXAMINERS
TPAs
 NEED FOR A STRONG REGULATOR AND
INSTITUTION LIKE OMBUDSMAN
Pre-1956 Lessons
Experiences in nationalised era
Scenario Post 1998
Level of consumerism
Global context
Scenario of present legal system
(i) delay / right to appeal
(ii) Cost
No single solution to the problem of
satisfying customer
 WHY AN UMPIRE IS
REQUIRED FOR
RESOLVING INSURANCE
DISPUTES ?
INSURER
INSURED/NOMINEE

STRONG DATA WEAK

AND DOCUMENTATION

WELL TECHNICAL TERMS NO

VERSED EXPERIENCE

ONLY AS PRE-PROPOSAL FAIRLY

WELL
ON PAPER DATA EQUIPPED OF
(TRUE OR FALSE) ALL DETAILS
 WHY AN UMPIRE IS
REQUIRED FOR
RESOLVING INSURANCE
DISPUTES ?

OMBUDSMAN

INSURER INSURED/
NOMINEE
1. FRONT OFFICE
2. BACK OFFICE
3. GRIEVANCE OFFICE
GOVERNING BODY OF INSURANCE
COUNCIL
Consist of one representative from each of

the insurance companies.

Representatives shall be Chairman or

Managing Director or any one of the

Directors of the company
Shall formulate its own procedure for

conducting its business including the

election of the Chairman.
APPOINTMENT OF OMBUDSMAN
The governing body shall appoint one
or more persons as ombudsman from
a panel prepared by the committee
consisting of Chairman of IRDA, Two
representatives of the Insurance
Council (one from life and one from
non-life), one representative of the
Central Government.
APPOINTMENT OF OMBUDSMAN

The Ombudsman selected may be

drawn from a wider circle including
those who have experience in
industry, civil service,
administrative service, judicial
service etc.
Term of Office
An Ombudsman shall be

appointed for a term of three

years or till the incumbent
attains the age of 65 years,
whichever is earlier. Re-
appointment is not permitted.
Territorial Jurisdiction
The Office of the Ombudsman shall be
located at such place as may be specified
by the Insurance Council
The Governing Body shall specify the
territorial jurisdiction of each Ombudsman.
At present there are 12 centres in India
The Ombudsman may hold sitting at
various places within his area of jurisdiction
in order to expedite disposal of complaints
Staf
Secretarial staff to be provided by the Insurance
Council after consultation with the Ombudsman
The Ombudsman may engage the services of
professional expert with a view to assist him in
discharging his functions.
The salary, allowances and perquisites payable
to Ombudsman and staff and all expenses
incurred shall be borne by the Insurance Council.
Personnel deputed for a term of 2/3 years from
Public Sector Life and non-life insurance
companies to assist the Ombudsman.
Staf
The Ombudsman shall prepare the budget
indicating the requirement of funds and will be
sent to the Governing Body.
The Governing Body will finalise the budget in
consultation with the Ombudsman and
allocate funds to the Office of the
Ombudsman.
The total expenses on Ombudsman and his
staff shall be incurred by the Insurance
companies who are members of the insurance
council in such proportion as may be decided
by the Governing Body from time to time.
The share of expenditure which is to incurred
by each insurance company shall be in the
ratio of premium income of the previous year.
REDRESSAL OF PUBLIC
GRIEVANCES RULES,
1998
(RPG RULES)
NOTIFICATION DATED
11.11.1998 AMENDED ON
18.12.1998 AND 21.06.1999.
 These Rules shall apply to all
the insurance companies
operating in general
insurance business and in life
insurance business in India
Objective - Cost effective,
efficient and impartial manner
 ENTERTAINABLE COMPLAINTS
The Ombudsman may receive and consider
complaints on
a. any partial or total repudiation of claims
b. any dispute in regard to premium paid or
payable
c. any dispute on the legal construction of
the policies in so far as such disputes
relate to claims
d. delay in settlement of claims
e. non-issue of any insurance documents
 Recommendations made by the
Ombudsman
Ombudsman to give recommendation
when there is Mutual agreement.
Complainant to communicate his
acceptance for the recommendation
The Insurer to comply with the
recommendation within 15 days of
the receipt of the consent from the
complainant and report to the
Ombudsman of the compliance.
Award made by the Ombudsman
Where the complaint is not settled by
agreement, the Ombudsman shall
conduct hearing and pass a speaking
award.
Power to make ex-gratia payment
If the Ombudsman deems fit he may
award an ex-gratia payment under Rule
18.
Complainant to give consent on receipt of
the award within 1 month to the insurer
The Insurer to comply within 15 days
 Consequences of non-
acceptance of award
The award may not be
implemented by the insurer if
the consent from the
complainant is not received
within the timeframe
specified.
The complainant has the right
to approach other forums.
 OMBUDSMAN
REAL TEST WHEN SITS ON JUDGEMENT
Effective listening
Allow steam to let out

Extract more and more data

Counsellor / Mediator

Finally to say Yes/No

No pushing paper vertical/horizontal

SOME STATISTICAL DATA
2007-08 1200 complaints received
2008-09 - Complaints received till December
Life: 568; Non-life:527= Total 1095
No. of awards given = Life:35; Non-
life:77
Decisions in favour of the company
Life: 17; Non- Life 33
Decisions in favour of the complainant
Life: 18; Non-life 44