Report No. 190

8.7 Machinery for redressal of grievances/ claims

The 1998 Rules

8.7.1 In 1998, the central government framed the Redressal of Public Grievances Rules, 1998 in exercise of the powers under section 114 (1) of the Insurance Act, 1938. Under these Rules, there was to be a governing body of Insurance Council which was in turn, under Rule 6 to appoint one or more persons as Ombudsman for the purposes of these Rules. An Ombudsman is appointed under Rule 7 for a term of three years and shall be eligible for reappointment. However, no Ombudsman shall hold office after attaining the age of 65 years.

8.7.2 Under Rule 12 the powers of the Ombudsman are to receive and consider:

(a) complaints under Rule 1.- i.e., a grievance by a person against an insurer, which complaint has to be made after rejection of such persons representation by the insurer;

(b) any partial or total repudiation of claims by an insurer;

(c) any dispute in regard to premium paid or payable in terms of the policy;

(d) any dispute on the legal construction of the policies in so far as such disputes relate to claims;

(e) delay in settlement of claims;

(f) non-issue of any insurance document to customers after receipt of premium;

8.7.3 Under Rule 12 (2) the Ombudsman "shall act as counsellor and mediator in matters which are within his terms of reference and, if requested do so in writing by mutual agreement by the insured person and the insurance company".

8.7.4 The decision of the Ombudsman is final. Under Rule 15 it appears that the insurance company has to comply with the decision of the Ombudsman whereas an option is given to the complainant whether or not he accepts the award. Where there is no such acceptance by the complainants, it is open to the Ombudsman pass an award "which he thinks fare in the facts and circumstances of the case".

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