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Insurance Ombudsman India: How to File a Complaint and What to Expect

Ever since insurance became part and parcel of financial planning in Indian households, complaints have become common, too. In such a scenario, the Insurance Ombudsman India emerges as a formal body aimed at protecting the rights of policyholders. Also known as Bima Lokpal, it is a free, accessible grievance resolution mechanism available to every insurance policyholder in India. 

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Grievance Eligibility

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Complaint Formats

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Hearing Outcomes

The scheme enables policyholders to settle their complaints:

  • In an impartial manner
  • In a cost-effective way
  • Efficiently

Your insurance policy is the safety net that keeps you out of danger of financial distress. If you’re unable to get reliable financial coverage from your insurer during times of crisis, the policy becomes a liability. Understanding how the Insurance Ombudsman India functions, therefore, is important when you’re insured and looking to get your grievances redressed.

What is the Insurance Ombudsman

Under the Insurance Ombudsman Rules, 2017, the Office of Insurance Ombudsman was set up to offer policyholders an opportunity to file complaints in case of disputes with their insurance company. Introduced by the Government of India, these offices are administered by the Council for Insurance Ombudsmen and governed by the Insurance Regulatory & Development Authority of India (IRDAI).

A quasi-judicial body, any policyholder who doesn’t feel satisfied with the resolutions provided by their insurance company can approach their nearest office of the Insurance Ombudsman India. The Ombudsman assigned to the case initially tries to mediate between the parties. If the parties do not reach a friendly settlement, a legal judgment is issued, which is binding on both parties:

  • Seeks to provide policyholders and insurers a level playing field
  • Aims to make grievance redressal smooth and worry-free
  • Aims to hold insurance companies accountable
  • Functions as an agent of fair and transparent judgment

Eligibility: Who Can File a Complaint with the Ombudsman

Typically, anyone who holds grievances against their insurance company can approach the Insurance Ombudsman India as the policyholder or through their nominees. A list of eligible persons includes:

  • Individual policyholders and their next of kin/heir/nominees
  • Individuals experiencing delays in the claim settlement process of a specific insurance policy beyond the period as stated by the IRDAI
  • Policyholders facing partial or complete rejection of their claims by their insurance company
  • Policyholders with disputes on premium payments
  • Policyholders with complaints about the misrepresentation of information in policy terms and conditions
  • Policyholders with complaints about the issuance of the policy
  • Policyholders with complaints that involve a violation of the terms and conditions outlined in the Insurance Act, 1938.

Prepare to approach the Insurance Ombudsman India if you meet the eligibility conditions.

What Types of Complaints are Covered

Understanding the types of insurance Ombudsman complaints addressed by the official body is a precondition for filing the right type of grievance. 

Listed below are the types of complaints heard by the Insurance Ombudsman India.

Claim Rejection

Insurance companies may reject claims without providing clear reasons or ensuring transparent communication. They may also reject it by applying a different interpretation of a policy provision during the claim settlement process.

Claim Delay

Insurers may delay crediting the claim amount or processing of claims due to procedural failures or inefficiency. They may also read policy limits differently, such as sub-limits and co-payment clauses, to justify the delay of claims to the policyholder. 

Premium-related Disputes

Insurance Ombudsman complaints related to premiums arise across policies of life insurance, health insurance, term insurance, and more. They typically include:

  • Overcharging of premiums
  • Failure on the insurer’s part to refund premiums 
  • Faulty record-keeping of premiums by the insurer
  • Uninformed or unreasonable increase in premiums
  • Lack of payment of bonuses, where they are due and promised

Policy Terms Disputes

Misunderstandings between the insurer and the insured, or misrepresentation of policy limits, form one of the most common reasons for disputes. Lack of clarity from the insurer or use of vague terminology in the policy document related to exclusions and lack of ethical behaviour leads to grievances.

Mis-selling

Understood as misleading sales practices, mis-selling by insurance companies can be in various shapes and forms:

  • Promising false returns or payouts
  • Lack of disclosure of hidden charges
  • Selling policies that do not align with the needs of an individual

How to File an Insurance Ombudsman Complaint: Steps to Follow

When your initial grievances with the insurance company go unresolved, follow these steps to file a complaint with the Bima Lokpal or insurance Ombudsman.

Step 1: Exhaust Insurer Process

Notifying your insurance provider and filing a complaint with the internal management is a non-negotiable first step. Without complying with these conditions, you cannot approach the Bima Lokpal.

  • Submit a written complaint with proper documentation to your insurer.
  • Wait for their response for 31 days.

If you do not get a response or get an unsatisfactory one, consider your escalation options. The Council of Insurance Ombudsmen or Bima Lokpal is your first option. However, the IRDAI Bima Bharosa portal functions as another grievance redressal system for all types of insurance-related complaints. It is primarily approached when the claim amount exceeds a certain limit.

Step 2: File Within One Year

Make sure that you haven’t exceeded the timeline for filing a complaint.

If applying online:

  • Fill in the proper policy and grievance details on the insurance Ombudsman’s portal.
  • Upload documents as required.
  • Submit the complaint online.

If filing a complaint offline:

  • Write out a complaint letter in the physical format.
  • Attach photocopies of the necessary documents.
  • Submit to the jurisdictional office closest to your location.

Step 3: Await Hearing Date

The insurance Ombudsman generally sends an official letter to the complainant as well as the insurance company for the hearing.

During the hearing, the Ombudsman tries to mediate a settlement for the involved parties. However, if mediation fails, the Ombudsman issues a binding verdict, also known as an “award”, that the insurer is bound to implement within one month.

In cases where the insured is unsatisfied with the Ombudsman’s verdict, they may approach a consumer court to get their grievances addressed.

Documents Required

 

Gather these documents before filing a complaint with the insurance Ombudsman.

  • ID proof and KYC particulars such as Aadhaar card, PAN card, or driving license
  • The details of the policy associated with the complaint
  • A photocopy of the complaint submitted to the insurance company
  • Letter by the insurance company rejecting a claim

Additional documents as may be required by the Ombudsman, such as:

  • An authorisation letter, if an heir or nominee is filing the complaint 
  • Proof of nomination and nominee’s details

What Happens at the Hearing

The settlement process during the hearing of your complaint involves making your case and trying for the best-case scenario.

 

What to Present

No legal person or lawyer is allowed during the hearing or the recommendation process for a complaint. The policyholder or complainant has to present the case themselves, and the defence has to be presented by the insurer without engaging a lawyer. They are generally required to provide the Ombudsman with the necessary documents, as may be demanded by them. 

 

How to Prepare

To prepare yourself for the best possible outcome or claim settlement, prepare by gathering all documents and claim rejection letters from your insurer. Keep copies of any additional communication via mail or messages with the insurance company. It is also advisable to read the policy document and highlight the policy clause that relates to your case.

 

Possible Outcomes

Three possible outcomes emerge at the end of the hearing:

  • Recommendation: The Ombudsman mediates between the parties and helps reach a settlement.
  • Award: When mediation fails, the Insurance Ombudsman India issues an award (compensation) that has to be implemented by the insurer in 30 days.
  • Consumer Court: The hearing leads to an unsatisfactory verdict. In such a case, you can approach the consumer court with your complaint.

Timeline: How Long Does Resolution Take

The timeline for the resolution of a complaint by the Insurance Ombudsman India may span from 4 to 6 months from the day the grievance is filed.

  • Recommendation is scheduled within 1 month of the date that both parties provide mutual written consent
  • Awards, in case mediation fails, are passed within 3 months from the date of receipt of all documents from the complainant
  • The insurer has to implement the award within 30 days or 1 month from the date that it is passed

What the Insurance Ombudsman India Cannot Do

The powers of the Insurance Ombudsman India come with limits.

  • It cannot handle complaints from policyholders that go beyond the claim amount or sum assured of ₹50 Lakh
  • It cannot preside over grievances arising from group health insurance policies involving employers
  • It cannot take up complaints that have been filed after the passing of the 1-year period
  • It cannot award policyholders any compensation that exceeds the limits specified in the policy document

In situations where the Insurance Ombudsman India cannot intervene for resolution, grievances can be escalated to the IRDAI Grievance Cell or the consumer court.

Ombudsman Offices in India

There are a total of 17 offices of the insurance ombudsmen in India. They are largely located in metropolitan cities.

Ahmedabad – Bengaluru – Bhopal – Bhubaneshwar – Chandigarh – Chennai – Delhi – Guwahati – Hyderabad – Jaipur – Ernakulam – Kolkata – Lucknow – Mumbai – Noida – Patna – Pune

Not sure what you need?

If your complaint involves amounts up to ₹50 Lakh and the insurer has not resolved it, the Ombudsman is often the most effective next step. Need help preparing your case? Our experts can guide you.

 

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FAQ

Frequently Asked Questions

Complaints with the insurance Ombudsman India are allowed to be lodged within one year of complaint rejection by the insurance company. Moreover, if your insurer fails to reply to a filed complaint within one month, you can get your grievance redressed by approaching the Ombudsman nearest to you.

The insurance Ombudsman’s office can reject a policyholder’s complaint if the latter has not complied with the conditions as outlined in the Insurance Ombudsman Rules. Complaints may be rejected if the insured has not filed a grievance with the insurance company before approaching the Ombudsman or has filed their complaint late.

Policyholders can avoid suffering from repeated claim rejections and premium disputes if they choose a reliable insurance company. Consider important factors such as the claim settlement ratio of the insurer and existing complaints against it. With a trustworthy insurer, you would not need to approach the Insurance Ombudsman India either.

As per the latest integrated Ombudsman scheme of the RBI, maximum compensation for customers of all banks, non-banks, and similar financial institutions has been raised to ₹30 Lakh for losses. It’s a sharp hike from the previous compensation limit of ₹20 Lakh for losses. 

It’s important to avoid making certain common mistakes when filing a complaint with the Insurance Ombudsman India to get a fair judgment. For example, do not submit your complaint without proper documentation or file it outside your jurisdiction. Additionally, do not file inactive policy complaints or grievances for claims that exceed policy limits.

Disclaimer: Ombudsman procedures may be updated. Check the latest guidelines for changes.

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