Govt Amends Insurance Ombudsman Rules for better Resolution of Policyholders’
Complaints regarding Insurance Service Deficiencies
The Government on 2nd March 2021 notified
comprehensive amendments to the Insurance Ombudsman Rules, 2017, with a view to
improve the working of the Insurance Ombudsman mechanism to facilitate resolution
of complaints regarding deficiencies in insurance services in a timely, cost-effective
and impartial manner.
The amended rules have enlarged the scope of complaints
to Ombudsmen from only disputes earlier to deficiencies in service on the part of
insurers, agents, brokers and other intermediaries. Further, insurance brokers have
been brought within the ambit of the Ombudsman mechanism, by empowering the Ombudsmen
to pass awards against insurance brokers as well.
Under the amended rules, the timeliness and cost-effectiveness
of the mechanism has been substantially strengthened. Policyholders will now be
enabled for making complaints electronically to the Ombudsman and a complaints management
system will be created to enable policyholders to track the status of their complaints
online. Further, the Ombudsman may use video-conferencing for hearings. To enable
access to relief through the Ombudsman mechanism even when there is vacancy in the
office of a particular Ombudsman, provision has been made for giving additional
charge to another Ombudsman, pending the filling of the vacancy.
A number of amendments have been made for securing
the independence and integrity of the Ombudsman selection process, while also building
in safeguards to secure the independence and impartiality of the appointed persons
while serving as Ombudsmen. Further, the selection committee will now include an
individual with a track record of promoting consumer rights or advancing the cause
of consumer protection in the insurance sector.
The Ombudsman mechanism was administered by the
Executive Council of Insurers, which has been renamed as the Council for Insurance
Ombudsmen.
Click here
to view Official Gazette Notification.