K. SRIDHAR INSURANCE OMBUDSMAN CHENNAI

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K. SRIDHARINSURANCE OMBUDSMAN CHENNAI
STRUCTURE AND FUNCTIONING OF INSURANCE OMBUDSMAN
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• INTRINSIC CHARACTERISTICS OF INSURANCE
  CONTRACTS DIFFER FROM OTHER CONTRACTS
• INSURANCE IS STILL SOLD AND NOT BOUGHT
• PRODUCTS NOT TANGIBLE ONLY PROMISES
• AFTER SALES SERVICE

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

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

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• 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

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WHY AN UMPIRE IS REQUIRED FOR RESOLVING INSURANCE
DISPUTES ?

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

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WHY AN UMPIRE IS REQUIRED FOR RESOLVING INSURANCE
DISPUTES ?

• OMBUDSMAN
• INSURER INSURED/
• NOMINEE
• 1. FRONT OFFICE
• 2. BACK OFFICE
• 3. GRIEVANCE OFFICE

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

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• APPOINTMENT OF OMBUDSMAN
• 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.

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

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• Term of Office
• An Ombudsman shall be appointed for a term of
  three years or till the incumbent attains the age
  of 65 years, whichever is earlier.
  Re-appointment is not permitted.

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• Territorial Jurisdiction
• 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

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• Staff
• 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.

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• Staff
• 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.

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FUNCTIONING OF INSURANCE OMBUDSMAN
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REDRESSAL OF PUBLIC GRIEVANCES RULES, 1998(RPG
RULES) NOTIFICATION DATED 11.11.1998 AMENDED ON
18.12.1998 AND 21.06.1999.
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• 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

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• 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

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• Recommendations made by the Ombudsman
• 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.

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• Award made by the Ombudsman
• Where the complaint is not settled by agreement,
  the Ombudsman shall conduct hearing and pass a
  speaking award.
• Power to make ex-gratia payment
• If the Ombudsman deems fit he may award an
  ex-gratia payment under Rule 18.
• Complainant to give consent on receipt of the
  award within 1 month to the insurer
• The Insurer to comply within 15 days

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

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

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• SOME STATISTICAL DATA
• 2007-08 1200 complaints received
• 2008-09 - Complaints received till December
• Life 568 Non-life527 Total 1095
• No. of awards given Life35 Non-life77
• Decisions in favour of the company
• Life 17 Non- Life 33
• Decisions in favour of the complainant
• Life 18 Non-life 44

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THANK YOU