Ombudsman Scheme

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Ombudsman Scheme

• Institution of Insurance Ombudsman created by the
  govt. in 1998
• importance and relevance
• protection of interests of policyholders, and
• building confidence in the insurance system

• specific function expeditious settlement of
  personal insurance claims
• 3members term of 3 years sittings can be at
  different places expenses borne
• by insurance companies who are members of
  Insurance Council.

• Two types of functions
• 1. to act as counselor mediator (on request by
  insurer and insured)
• 2. award making (as per vested authority)

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• complaints referred to relate to
• 1. partial or total repudiation of claims
• 2. premium paid or payable in terms of policy
• 3. legal construction of policies
• 4. delay in claim settlement
• 5. non-issuance of insurance documents
• complaints made by insured / legal heirs in
  writing by individual policyholders
• advocates not allowed
• complaints sent to Ombudsman only when
• 1. written representation rejected
• 2. reply not received for over a month
• 3. complainant not satisfied with reply
• complaints to be made within a year of rejection
  of representation

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• Powers restricted to contracts of value not
  exceeding Rs.20Lakhs
• Companies required to honour the Award within
  three months
• Award to be passed within three months from
  receipt of complaint
• award binding upon insurance companies
• policyholders, if not satisfied, can approach
  other avenues consumer fora /
• courts for redressal
• 12 ombudsman offices not adequate.

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• Consumer Protection Act, 1986
• socio-economic legislation
• ensures speedy, cost-effective disposal of
  grievances
• amendment of 15.3.2003 makes it more functional
  purposeful
• Act applies to all goods services (unless
  exempted)
• Consumer
• 1. one who buys goods or hires services for a
  consideration
• 2. beneficiary of such service
• exclusion services free of charge
• defective goods, deficiency of service provide
  cause for complaint

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• Service
• we in insurance mainly concerned with service
  aspect
• insurance is a service to public
• as also banking , finance, transport- - -
• deficiency means fault, imperfection,
  shortcoming, inadequacy
• complaints required to be made within two years
  - - -(of cause of action)
• Three fora
• (570) District Forum jurisdiction upto 20Lakhs
• (35) State Commission above 20Lakhs
  upto one crore
• National Commission - above one
  crore
• forums vested with powers of civil courts
• Appeals lowest forum to next to next to
  Supreme Court ultimately
• complaints filed on plain paper supported by
  documents
• for appeals no fees, within 30 days
• decision within three months

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• deficiency may concern
• 1 issuance of receipts, policy documents
• 2. transfer of policy files
• 3. quick claim settlement
• 4. quick loan settlement - - - -

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