K. SRIDHARK. SRIDHARINSURANCE OMBUDSMAN INSURANCE OMBUDSMAN

CHENNAICHENNAI

K. SRIDHARK. SRIDHARINSURANCE OMBUDSMAN INSURANCE OMBUDSMAN

CHENNAICHENNAI

INTRINSIC CHARACTERISTICS INTRINSIC CHARACTERISTICS OF INSURANCE CONTRACTS OF INSURANCE CONTRACTS

DIFFER FROM OTHER DIFFER FROM OTHER CONTRACTSCONTRACTS

INSURANCE IS STILL SOLD AND INSURANCE IS STILL SOLD AND NOT BOUGHTNOT BOUGHT

PRODUCTS – NOT TANGIBLE – PRODUCTS – NOT TANGIBLE – ONLY PROMISESONLY PROMISES

AFTER SALES SERVICEAFTER SALES SERVICE

INTRINSIC CHARACTERISTICS INTRINSIC CHARACTERISTICS OF INSURANCE CONTRACTS OF INSURANCE CONTRACTS

DIFFER FROM OTHER DIFFER FROM OTHER CONTRACTSCONTRACTS

LEVEL OF KNOWLEDGE OF LEVEL OF KNOWLEDGE OF INSURED/NOMINEEINSURED/NOMINEE

LAWS OF LANDLAWS OF LAND LAWS OF CONTRACTLAWS OF CONTRACT LAWS OF INSURANCELAWS OF INSURANCE

INTRINSIC CHARACTERISTICS OF INTRINSIC CHARACTERISTICS OF INSURANCE CONTRACTS DIFFER INSURANCE CONTRACTS DIFFER

FROM OTHER CONTRACTSFROM OTHER CONTRACTS

CRUCIAL ROLE PLAYED BY CRUCIAL ROLE PLAYED BY INTERMEDIARIESINTERMEDIARIES

AGENTS INCLUDING AGENTS INCLUDING BROKERS/CORPORATE AGENTSBROKERS/CORPORATE AGENTS

SALES TEAMSALES TEAM MEDICAL EXAMINERSMEDICAL EXAMINERS TPAsTPAs

NEED FOR A STRONG REGULATOR AND NEED FOR A STRONG REGULATOR AND INSTITUTION LIKE OMBUDSMANINSTITUTION LIKE OMBUDSMAN

Pre-1956 LessonsPre-1956 Lessons Experiences in nationalised eraExperiences in nationalised era Scenario – Post 1998Scenario – Post 1998 Level of consumerismLevel of consumerism Global contextGlobal context Scenario of present legal systemScenario of present legal system

(i) delay / right to appeal(i) delay / right to appeal (ii) Cost(ii) Cost No single solution to the problem of No single solution to the problem of

satisfying customersatisfying customer

WHY AN UMPIRE IS WHY AN UMPIRE IS REQUIRED FOR REQUIRED FOR

RESOLVING INSURANCE RESOLVING INSURANCE DISPUTES ?DISPUTES ?

INSURERINSURER INSURED/NOMINEEINSURED/NOMINEE

STRONG DATA WEAKAND DOCUMENTATION

WELL TECHNICAL TERMS NO VERSED

EXPERIENCE

ONLY AS PRE-PROPOSAL FAIRLY WELL ON PAPER DATA EQUIPPED OF (TRUE OR FALSE) ALL DETAILS

WHY AN UMPIRE IS WHY AN UMPIRE IS REQUIRED FOR REQUIRED FOR

RESOLVING INSURANCE RESOLVING INSURANCE DISPUTES ?DISPUTES ?

OMBUDSMANOMBUDSMAN

INSURER INSURED/INSURER INSURED/ NOMINEENOMINEE 1. FRONT OFFICE 1. FRONT OFFICE

2. BACK OFFICE2. BACK OFFICE3. GRIEVANCE OFFICE3. GRIEVANCE OFFICE

GOVERNING BODY OF INSURANCE GOVERNING BODY OF INSURANCE COUNCILCOUNCIL

Consist of one representative from each of Consist of one representative from each of the insurance companies.the insurance companies.

Representatives shall be Chairman or Representatives shall be Chairman or Managing Director or any one of the Managing Director or any one of the Directors of the companyDirectors of the company

Shall formulate its own procedure for Shall formulate its own procedure for conducting its business including the conducting its business including the election of the Chairman.election of the Chairman.

APPOINTMENT OF OMBUDSMANAPPOINTMENT OF OMBUDSMAN The governing body shall appoint The governing body shall appoint

one or more persons as ombudsman one or more persons as ombudsman from a panel prepared by the from a panel prepared by the committee consisting of Chairman of committee consisting of Chairman of IRDA, Two representatives of the IRDA, Two representatives of the Insurance Council (one from life and Insurance Council (one from life and one from non-life), one one from non-life), one representative of the Central representative of the Central Government.Government.

APPOINTMENT OF OMBUDSMANAPPOINTMENT OF OMBUDSMAN

The Ombudsman selected may be The Ombudsman selected may be drawn from a wider circle including drawn from a wider circle including those who have experience in those who have experience in industry, civil service, industry, civil service, administrative service, judicial administrative service, judicial service etc.service etc.

Term of OfficeTerm of Office An Ombudsman shall be An Ombudsman shall be

appointed for a term of three appointed for a term of three years or till the incumbent years or till the incumbent attains the age of 65 years, attains the age of 65 years, whichever is earlier. Re-whichever is earlier. Re-appointment is not permitted.appointment is not permitted.

Territorial JurisdictionTerritorial Jurisdiction The Office of the Ombudsman shall be The Office of the Ombudsman shall be

located at such place as may be specified located at such place as may be specified by the Insurance Councilby the Insurance Council

The Governing Body shall specify the The Governing Body shall specify the territorial jurisdiction of each Ombudsman.territorial jurisdiction of each Ombudsman.

At present there are 12 centres in IndiaAt present there are 12 centres in India The Ombudsman may hold sitting at The Ombudsman may hold sitting at

various places within his area of jurisdiction various places within his area of jurisdiction in order to expedite disposal of complaintsin order to expedite disposal of complaints

StaffStaff Secretarial staff to be provided by the Insurance Secretarial staff to be provided by the Insurance

Council after consultation with the OmbudsmanCouncil after consultation with the Ombudsman The Ombudsman may engage the services of The Ombudsman may engage the services of

professional expert with a view to assist him in professional expert with a view to assist him in discharging his functions.discharging his functions.

The salary, allowances and perquisites payable The salary, allowances and perquisites payable to Ombudsman and staff and all expenses to Ombudsman and staff and all expenses incurred shall be borne by the Insurance incurred shall be borne by the Insurance Council. Personnel deputed for a term of 2/3 Council. Personnel deputed for a term of 2/3 years from Public Sector Life and non-life years from Public Sector Life and non-life insurance companies to assist the Ombudsman.insurance companies to assist the Ombudsman.

StaffStaff The Ombudsman shall prepare the budget The Ombudsman shall prepare the budget

indicating the requirement of funds and will indicating the requirement of funds and will be sent to the Governing Body.be sent to the Governing Body.

The Governing Body will finalise the budget in The Governing Body will finalise the budget in consultation with the Ombudsman and consultation with the Ombudsman and allocate funds to the Office of the allocate funds to the Office of the Ombudsman.Ombudsman.

The total expenses on Ombudsman and his The total expenses on Ombudsman and his staff shall be incurred by the Insurance staff shall be incurred by the Insurance companies who are members of the insurance companies who are members of the insurance council in such proportion as may be decided council in such proportion as may be decided by the Governing Body from time to time.by the Governing Body from time to time.

The share of expenditure which is to incurred The share of expenditure which is to incurred by each insurance company shall be in the by each insurance company shall be in the ratio of premium income of the previous year.ratio of premium income of the previous year.

REDRESSAL OF PUBLIC REDRESSAL OF PUBLIC GRIEVANCES RULES, GRIEVANCES RULES,

19981998(RPG RULES) (RPG RULES)

NOTIFICATION DATED NOTIFICATION DATED 11.11.1998 AMENDED ON 11.11.1998 AMENDED ON

18.12.1998 AND 21.06.1999.18.12.1998 AND 21.06.1999.

These Rules shall apply to all These Rules shall apply to all the insurance companies the insurance companies operating in general insurance operating in general insurance business and in life insurance business and in life insurance business in Indiabusiness in India

Objective - Cost effective, Objective - Cost effective, efficient and impartial mannerefficient and impartial manner

ENTERTAINABLE COMPLAINTSENTERTAINABLE COMPLAINTSThe Ombudsman may receive and consider The Ombudsman may receive and consider

complaints oncomplaints ona. a. any partial or total repudiation of claimsany partial or total repudiation of claimsb. any dispute in regard to premium paid or b. any dispute in regard to premium paid or

payable payable c. any dispute on the legal construction of c. any dispute on the legal construction of

the policies in so far as such disputes the policies in so far as such disputes relate to claimsrelate to claims

d. delay in settlement of claimsd. delay in settlement of claimse. non-issue of any insurance documentse. non-issue of any insurance documents

Recommendations made by the Recommendations made by the OmbudsmanOmbudsman

Ombudsman to give recommendation Ombudsman to give recommendation when there is Mutual agreement. when there is Mutual agreement.

Complainant to communicate his Complainant to communicate his acceptance for the recommendationacceptance for the recommendation

The Insurer to comply with the The Insurer to comply with the recommendation within 15 days of recommendation within 15 days of the receipt of the consent from the the receipt of the consent from the complainant and report to the complainant and report to the Ombudsman of the compliance.Ombudsman of the compliance.

Award made by the OmbudsmanAward made by the Ombudsman Where the complaint is not settled by Where the complaint is not settled by

agreement, the Ombudsman shall agreement, the Ombudsman shall conduct hearing and pass a speaking conduct hearing and pass a speaking award. award.

Power to make ex-gratia paymentPower to make ex-gratia payment If the Ombudsman deems fit he may If the Ombudsman deems fit he may

award an ex-gratia payment under Rule award an ex-gratia payment under Rule 18.18.

Complainant to give consent on receipt of Complainant to give consent on receipt of the award within 1 month to the insurerthe award within 1 month to the insurer

The Insurer to comply within 15 daysThe Insurer to comply within 15 days

Consequences of non-Consequences of non-acceptance of awardacceptance of award

The award may not be The award may not be implemented by the insurer if implemented by the insurer if the consent from the the consent from the complainant is not received complainant is not received within the timeframe within the timeframe specified. specified.

The complainant has the right The complainant has the right to approach other forums.to approach other forums.

OMBUDSMAN – OMBUDSMAN –

REAL TEST WHEN SITS ON JUDGEMENTREAL TEST WHEN SITS ON JUDGEMENT Effective listeningEffective listening Allow steam to let outAllow steam to let out Extract more and more dataExtract more and more data Counsellor / MediatorCounsellor / Mediator Finally to say Yes/NoFinally to say Yes/No

No pushing paper vertical/horizontalNo pushing paper vertical/horizontal

SOME STATISTICAL DATASOME STATISTICAL DATA 2007-08 – 1200 complaints received2007-08 – 1200 complaints received 2008-09 - Complaints received till December2008-09 - Complaints received till December

Life: 568; Non-life:527= Total 1095Life: 568; Non-life:527= Total 1095 No. of awards given = Life:35; Non-No. of awards given = Life:35; Non-

life:77life:77 Decisions in favour of the companyDecisions in favour of the company

Life: 17; Non- Life 33Life: 17; Non- Life 33 Decisions in favour of the complainantDecisions in favour of the complainant

Life: 18; Non-life 44Life: 18; Non-life 44