K SRIDHAR INSURANCE OMBUDSMAN CHENNAI INTRINSIC CHARACTERISTICS OF

K. SRIDHAR INSURANCE OMBUDSMAN CHENNAI

INTRINSIC CHARACTERISTICS OF INSURANCE CONTRACTS DIFFER FROM OTHER CONTRACTS n n n INSURANCE IS STILL SOLD AND NOT BOUGHT PRODUCTS – NOT TANGIBLE – ONLY PROMISES AFTER SALES SERVICE

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

INTRINSIC CHARACTERISTICS OF INSURANCE CONTRACTS DIFFER FROM OTHER CONTRACTS n CRUCIAL ROLE PLAYED BY INTERMEDIARIES n n AGENTS INCLUDING BROKERS/CORPORATE AGENTS SALES TEAM MEDICAL EXAMINERS TPAs

n n n n 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 STRONG INSURED/NOMINEE DATA AND DOCUMENTATION WEAK WELL VERSED TECHNICAL TERMS NO EXPERIENCE ONLY AS ON PAPER PRE-PROPOSAL DATA (TRUE OR FALSE) FAIRLY WELL EQUIPPED OF ALL DETAILS

WHY AN UMPIRE IS REQUIRED FOR RESOLVING INSURANCE DISPUTES ? OMBUDSMAN INSURER 1. FRONT OFFICE 2. BACK OFFICE 3. GRIEVANCE OFFICE INSURED/ NOMINEE

GOVERNING BODY OF INSURANCE COUNCIL n Consist of one representative from each of the insurance companies. n Representatives shall be Chairman or Managing Director or any one of the Directors of the company n Shall formulate its own procedure for conducting its business including the election of the Chairman.

APPOINTMENT OF OMBUDSMAN n 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 n 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 n An Ombudsman shall be appointed for a term of three years or till the incumbent attains the age of 65 years, whichever is earlier. Reappointment is not permitted.

Territorial Jurisdiction n n 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

Staff n n n 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.

Staff n n 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. 1998 AMENDED ON 18. 12. 1998 AND 21. 06. 1999.

n n 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

n n n Recommendations made by the 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 n Where the complaint is not settled by agreement, the Ombudsman shall conduct hearing and pass a speaking award. Power to make ex-gratia payment n If the Ombudsman deems fit he may award an ex-gratia payment under Rule 18. n Complainant to give consent on receipt of the award within 1 month to the insurer n 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. n The complainant has the right to approach other forums. n

OMBUDSMAN – REAL TEST WHEN SITS ON JUDGEMENT Effective listening n Allow steam to let out n Extract more and more data n Counsellor / Mediator n Finally to say Yes/No n No pushing paper vertical/horizontal

SOME STATISTICAL DATA n 2007 -08 – 1200 complaints received n 2008 -09 - Complaints received till December n n n 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