Grievance Redressal Mechanism in Indian Insurance Sector

Having a complaint or a grievance with the insurance company or an insurance intermediary is not uncommon. Various policyholders feel that they have been cheated with respect to their insurance policy. They either feel that the agent sold them a wrong policy or that the insurance company did not fulfil its end of the bargain. What is to be done in the event of any complaint? Does the policyholder have any room for redressal of his / her grievances?

Actually, the policyholder does. The Insurance Regulatory and Development Authority (IRDA) has made sure that there is an insurance grievance redressal process for the aggrieved policyholders. It is known as the Protection of Policy Holders Rights. This process starts with the insurance company and escalates up to the consumer forum if the customer does not find the resolution to a complaint.

So, let’s understand the insurance grievance redressal mechanism available for insurance policies –

Step 1 – Approaching The Insurance Company

The first step is to approach the insurance company from whom you have bought the insurance policy. Every insurance company has a dedicated grievance handling cell as mandated by IRDA. The company lists the details of its grievance cell in the policy document and also in the plan’s brochure. There is an address, an email address and a contact number of all offices handling any complaints. You can call the number, write a letter or leave a mail stating the nature of your grievance and the company handles it internally. If you do not get a response to your complaint within 15 days, you can contact the insurance company’s regional or central office’s grievance cell stating that your grievance has not been acknowledged or addressed. If you do not get response from the central office as well within 30 days, or if the resolution is not to your liking, you can escalate your matter to IRDAI as explained below.

Step 2 – Approaching IRDAI Through Its Integrated Grievance Management System (IGMS)

IRDAI also provides grievance support through IGMS which can be reached at www.igms.irdai.in. You can visit this website and register your complaint. When you do so, IRDA follows-up with the insurance company at its end with respect to your grievance. Though the regulator follows-up with the insurance company, you might not get a suitable solution. In that case, approaching an ombudsman is always recommended. So, while you register your complaint at IGMS, you can, simultaneously, prepare to approach the ombudsman.

Step 3 – Going to An Insurance Ombudsman

An insurance ombudsman is a non-judicial arbitrator appointed to handle insurance claims (retail and SME products) and seeking solutions for the same. If, after you have complained to the insurance company, the company does not give a solution to your problem within 30 days, you can go to the ombudsman. Ombudsmen hear cases and pass judgment and their details are found in the policy document. There are different ombudsmen for different territories and you have to approach the ombudsmen for your territory. Your case should be referred to the ombudsman within 12 months of the dispute. Beyond this period, no grievance is handled. You should submit all relevant information pertaining to your grievance in a specified format and also all documents showing that you have followed-up with the insurer and the insurer’s response or lack of it you. The ombudsman has the authority to hear cases up to Rs.30 lakhs and is supposed to give his verdict within 3 months. A decision of the Ombudsman is binding on the insurer/intermediary and not on the complainant.

Step 4 – Consumer forum

Consumer forum gives you a judicial solution which is not possible for the ombudsman. You can approach the consumer forum for your case in case of service deficiency complaints. The consumer forum is a district court which helps in seeking solution of your grievances. If you are not satisfied with the ombudsman’s solution or if the case is beyond the ombudsman’s authority, the consumer forum can be your next stop. You can take the help of a lawyer to prepare your case is a specified format. There would be no legal fees charged by the forum for filing the complaint. The forum entertains your case only within 2 years from the date of grievance. Moreover, there are three levels of the forum depending on your claim amount. If the amount is up to Rs.20 lakhs, the forum at the district level would help you. If the amount is above Rs.20 lakhs and up to Rs.1 crore, it would be undertaken by the state forum. For claims over Rs.1 crore, the national forum handles the case.

So, seeking redressal of your grievance is simple if you know-how. Just seek the relevant steps based on your complaints and get your problem solved. Start with the insurance company and escalate it to the consumer forum if required but know the process. It is simple if you are aware.

Choose wisely!

Jul 30, 2021
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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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