Govt issues new rules for insurance ombudsman

On 22 December, the finance ministry issued a draft Insurance Ombudsman (Amendment) Rules, 2020, to amending the 2017 Insurance Ombudsman Rules. Under the new rules, the Council for Insurance Ombudsmen will take over the duties of the Executive Council of Insurers.

According to the circular, “…an online platform has to be developed by the Council for Insurance Ombudsmen for online submission and tracking of the status of complaints lodged with any office of Ombudsman.”

Chandan D. S. Dang, executive director, SecureNow.in, a Delhi-based online insurance broking firm, said the draft rules specify insured-friendly changes such as providing an online management system for submission and tracking of complaints to Ombudsmen. Dang added that, “As per the new notification, the Ombudsman may, on his own or the request of the complainant, hear a matter through video conference if he is satisfied that circumstances so require, after notifying the complainant and the insurer concerned, subject to guidelines issued by the Council for Insurance Ombudsmen in this regard and published on its website.”

Dang said the insurance ombudsman shall receive and consider complaints relating to deficiency in insurance services provided by an insurer (and not just on disputes), and on any other matter arising from the violation of the provisions or rules of the Insurance Act, 1938, or of the IRDAI Regulations, 2017.

This also covers violation of the terms and conditions of the policy contract. “The Council structure seems to have been made more independent of insurers which is good, and there is an option of online hearing that has been created. This was much needed,” Dang added.