INSURANCE OMBUDSMAN

PROJECT REPORT ON INSURANCE OMBUDSMAN BACHELOR OF BANKING & INSURANCE (B.B.I.) SEMESTER VI In Partial Fulfillment of the requirement For the Award of Degree of Bachelor of Banking & insurance (BBI) By PRAVIN M. KHARATE ROLL NO.1228026 SHRI SIDH THAKURNATH COLLEGE OF ARTS AND COMMERCE, ULHASNAGAR 421 004

UNIVERSITY OF MUMBAI

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Sr No.

TOPICS

Page No.

What is Insurance Meaning

Types of Insurance Life Insurance and General Insurance

What is Ombudsman Ombudsman In India Functions of Ombudsman Types of Ombudsman

8 10

Process of IRDA on OMBUDSMAN Powers and Jurisdiction

20

Ombudsman WILL & WONT

23

Literature Review

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Consumer Protection Act Rights of Consumer

26

Procedure For Filling Complaint

34

Reasearch Methodolgy

37

10

Data Anaylsis and Findings Analysis of Life and Non Life Insurance

38

11

Consumer Greivances Redress by Insurance Omudsman Process

45

12

Case Studies

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13 14 15 16

Field Study Conclusion Annexure Biblography & Weblography

55 58 58 67

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COMPANY PROFILE

The Ombudsman Insurance :

The Ombudsman of Insurance is a Foundation established by the Insurance Association in 1972.

The Foundation sponsors Ombudsman offices First in Maharashtra Bihar (1974), Uttar Pradesh (1977), Madhya Pradesh (1981), Andhra Pradesh (1983), Himachal Pradesh (1983), Karnataka (1984), Assam (1986), Gujarat (1988), Delhi (1995), Punjab (1996), Kerala (1998), Chhattishgarh (2002), Uttaranchal (2002), West Bengal (2003) and Haryana (2004).

Their main functions are:

To receive from the public communications in respect of complaints, disputes and claims in connection with or arising out of private insurance contracts. To provide guidance and advice to insurance customers. To facilitate the settlement of claims and the resolution of disputes. To help obtain fair and reasonable outcomes.

Deals Releated to :

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Banking Ombudsman, S.E.B.I. Ombudsman, Electricity Ombudsman, Telecom Ombudsman, Telecom Ombudsman, Insurance Ombudsman.

The Insurance Ombudsman shall receive and consider complaints relating to the deficiencies in Insurance or other services filed on the grounds mentioned in clause 8 and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the concerned and the aggrieved parties or by passing an Award in accordance with the Scheme.

The Insurance Ombudsman shall exercise general powers of super intendance and control over his Office and shall be responsible for the conduct of business thereat.

The Office of the Insurance Ombudsman shall draw up an annual budget for itself in consultation with IRDA and shall exercise the powers of expenditure within the approved budget on the lines of IRDA of India Expenditure Rules, 2005.

The Insurance Ombudsman shall send to the Governor, IRDA, are port, as on 30th June every year, containing a general review of the activities of his Office during the preceding financial year and shall furnish such other information as the IRDA may direct and the IRDA may, if it considers necessary in the public interest so to do, publish the report and the information received from the Insurance Ombudsman in such consolidated form or otherwise as it deems fit.

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OBJECTIVES OF STUDY

The study seeks to evaluate the approach of Insurance Ombudsman in the redress of consumer grievances and to ascertain the extent of relief provided to the aggrieved consumers.

To know the Ombudsman Strategies releating to Insurance Sector. To know the growth of Insurance Ombudsman. To know the Four Ps and SWOT Analysis of Ombudsman. To gain a practical knowledge. To know better about current Working Structure of Insurance Ombudsman.

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WHAT IS INSURANCE
Meaning:
Insurance may be described as a social device to ensure protection of economic value of life and other assets. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus, collective bearing of risk is insurance. Insurance = Collective Bearing of Risks

Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term "risk" is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals. Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, Insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose.

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Insurance May Be Define AS:

Insurance accumulates contributions of all parties participating in the scheme. D.S. Hansell. Insurance is a contract in which a sum of money is paid to the assured as consideration of insurers incurring the risk of paying a large sum upon a given contingency. Justice Tindall.

Working of Insurance

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TYPES OF INSURANCE
Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as perils. An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are non-exhaustive lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, vehicle insurance would typically cover both the property risk (theft or damage to the vehicle) and the liability risk (legal claims arising from an accident). Certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property. Business insurance can take a number of different forms, such as the various kinds of professional liability insurance, also called professional indemnity (PI), which are discussed below under that name; and the business owner's policy (BOP), which packages into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs.

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LIFE INSURANCE : According to the U.S. Life Office Management Inc. (LOMC), "Life Insurance provides a sum of money if the person who is insured dies whilst the policy is in effect." Life insurance has come a long way from the earlier days when it was originally conceived as a risk-covering medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established, it was realized what a useful tool it was for a number of situations that includes temporary needs/threats, savings, investment, retirement etc. The Government began to exercise a certain measure of control on Insurance business by passing the `Insurance Act in 1912. For controlling investment of funds, expenditure and management, a comprehensive Act was passed known as `The Insurance Act 1938. For controlling the affairs, the office of Controller of Insurance was established. The act was extensively amended in 1950. The Life Insurance Corporation Act was passed by the Parliament in June 1956 which came in force on 1st July 1956.

GENERAL INSURANCE With the opening up of the insurance industry to the private sector, the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life

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Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries (for general insurance business). The General Insurance business in India was nationalized with effect from 1.1.1973 by the General Insurance Business (Nationalization) Act, 1972 and a Government company known as General Insurance Corporation of India was formed. 107 Indian and foreign insurers which were operating in the country prior to nationalisation, were grouped into four operating companies namely National Insurance Company Ltd. Oriental Insurance Company Ltd. New India Assurance Company Ltd. United India Insurance Company Ltd. The Government of India subscribed to the capital of GIC. GIC, in turn, subscribed to the capital of the above four companies. All the four companies are government companies registered under the Companies Act. All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC.

FIRE INSURANCE : A fire insurance is a contract under which the insurer in return for a consideration (premium) agrees to indemnify the insured for the financial loss which the latter may suffer due to destruction of or damage to property or goods, caused by fire, during a specified period. The contract specifies the maximum amount , agreed to by the parties at the time of the contract, which the insured can claim in case of loss. This amount is not , however , the measure of the loss. The loss can be ascertained only after the fire has

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occurred. The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy. A fire insurance policy cannot be assigned without the permission of the insurer because the insured must have insurable interest in the property at the time of contract as well as at the time of loss. The insurable interest in goods may arise out on account of (i) ownership, (ii) possession, or (iii) contract. A person with a limited interest in a property or goods may insure them to cover not only his own interest but also the interest of others in them. MARINE INSURANCE : A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent agreed, against losses incidental to marine adventure. There is a marine adventure when any insurable property is exposed to maritime perils i.e. perils consequent to navigation of the sea. The term 'perils of the sea' refers only to accidents or causalities of the sea, and does not include the ordinary action of the winds and waves. Besides, maritime perils include, fire, war perils, pirates, seizures and jettison, etc. In a contract of marine insurance,the insured must have insurable interest in the subject matter insured at the time of the loss. Insurable interest is not required to be present at the time of taking the policy.

Motor Vehicle Insurance : A personal or commercial vehicle is subjected to combined insurance against the risks of :- (i) loss or damage to the motor vehicle and its accessories on account of accident or theft; (ii) death of or injury to the owner or passenger of the vehicle due to accident; (iii) damages payable to third parties by the owner of the vehicle for accident. A comprehensive insurance policy may be taken to cover all these risks. Insurance against the first two types of risks is optional. But every owner of motor vehicle is required to take out an insurance policy to cover the third party risks under the Motor Vehicles Act,

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1956. Such a policy is known as 'third party insurance or liability insurance'. Under such a policy, the third party who has suffered any loss can sue the insurer directly even though he was not a party to the contract of insurance. For example, motor insurance by United India Insurance Company Limited. This policy provides insurance cover to owners of the vehicle, financiers or lessee, who have insurable interest in a motor vehicle.

Mediclaim Insurance :

Mediclaim Insurance is a hospitalisation benefit policy offered by public and private sector general insurance companies. The policy provides for reimbursement of Hospitalisation / Domiciliary hospitalisation expenses for illness/ disease suffered or accidental injury sustained during the policy period. The policy pays for expenses incurred under the following heads : A) Room, Boarding Expenses in the Hospital/ Nursing home. B) Nursing expenses. C) Surgeon, Anaesthetist, Medical Practitioner, Consultants, Specialist fees. D) Anaesthesia, Blood, Oxygen, Operation theatre Charges, Surgical Appliances, Medicines and Drugs, Diagnostic Materials, and X-Ray, Dialysis, Chemotherapy, Radiotherapy, Cost of Pacemaker, Artificial Limbs and Cost of organs and similar expenses.

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WHAT IS AN OMBUDSMAN

An ombudsman is a person who acts as a

trusted intermediary between either

the state (or elements of it) or an organization, and some internal or external constituency, while representing not only but mostly the broad scope of constituent interests. An indigenous Danish and Norwegian, and Swedish term, Ombudsman is etymologically rooted in the Old Norse word, essentially meaning "representative". In its most frequent modern usage, an ombudsman is an official, usually appointed by the government or by parliament but with a significant degree of independence, who is charged with representing the interests of the public by investigating and addressing complaints reported by individuals. Modern variations of this term include "ombud", "ombuds", "ombudsperson", or "ombudswoman". Whether appointed by the legislature, the executive, or an organization (or, less frequently, elected by the constituency), the typical duties of an ombudsman are to investigate constituent complaints and attempt to resolve them, usually through recommendations (binding or not) or mediation. Ombudsmen sometimes also aim to identify systemic issues leading to poor service or breaches of people's rights. At the

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national level, most ombudsmen have a wide mandate to deal with the entire public sector, and sometimes also elements of the private sector (for example, contracted service providers). In some cases, there is a more restricted mandate, for example with particular sectors of society.

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OMBUSDSMAN IN INDIA
The Government of India has designated several ombudsmen (sometimes called Chief Vigilance Officer or CVO) for the redress of grievances and complaints from individuals in the Insurance, insurance and other sectors being serviced by both private and public bodies and corporations. The CVC (Central Vigilance Commision) was set up on the recommendation of the Santhanam Committee (196264). In India, the Ombudsman is known as the Lokpal or Lokayukta.

An Administrative Reforms Commission (ARC) was set up on 5 January 1966 under the Chairmanship of Shri Morarji Desai. It recommended two-tier machinery: Lokpal at the Centre (parliamentary commissioner, as in New Zealand) and one Lokayukta each at the State level for redress of people's grievances. However, the jurisdiction of the Lokpal did not extend to the judiciary. The central Government introduced the first Lokpal Bill, Lokpal and Lokayukta Bill in 1968, and further legislation was introduced in 2005, but has so far not been enacted. The state-level Lokayukta institution has developed gradually. Orissa was the first state to present a bill on establishment of Lokayukta in 1970, but Maharashtra was the first to establish the institution, in 1972. Other states followed: Bihar (1974), Uttar Pradesh (1977), Madhya Pradesh (1981), Andhra Pradesh (1983), Himachal Pradesh (1983), Karnataka (1984), Assam (1986), Gujarat (1988), Delhi (1995), Punjab (1996), Kerala (1998), Chhattishgarh (2002), Uttaranchal (2002), West Bengal (2003) and Haryana (2004). The structure of the Lokayukta is not uniform across all the states. Some states have Upalokayukta under the Lokayukta and in some states, the Lokayukta does not have suo moto powers of instigating an enquiry. Kerala State has an Ombudsman for Local Self Government institutions like Panchayats, Municipalities and Corporations. He or she can enquire/investigate into allegations of action, inaction, corruption and maladministration.

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FUNCTIONING OF THE OFFICES OF THE OMBUDSMAN

The institution of Insurance Ombudsman was created by a Government of India Notification dated 11th November, 1998 with the purpose of quick disposal of the grievances of the insured customers and to mitigate their problems involved in redressal of those grievances. This institution is of great importance and relevance for the protection of interests of policy holders and also in building their confidence in the system. The institution has helped to generate and sustain the faith and confidence amongst the consumers and insurers.

THE INSURANCE OMBUDSMAN :

It is a Government of Indias machinery for redressal of grievances of insurance consumers. Complaints of insurance consumers pertaining to repudiation, delay in settlement of claims, non-receipt of policy, disputes regarding paid or payable premium regarding their Personal line insurances like Life insurance, motor, mediclaim, householders etc can be lodged with the Insurance Ombudsman. Complaint is required to be filed in writing, No fees/charges are required to be paid, No advocate is required, Insured is necessarily required to first approach the concerned insurer. Complaint is

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required to be filed in the office of ombudsman in whose jurisdiction policy issuing office of insurer is located. Complaint may pertain to life or non-life and public or private insurance company. Complaint can be lodged within 1 year of rejection by insurer and it should not be pending in any civil or consumer court. Complaints of the amounts upto Rs.20 lacs can be filed. Ombudsman recommends the settlement of the complaints by mediation within 1 month, otherwise passes the award within 3 months of receipt of complaint. Award is binding on the insurer but it is not binding on the complainant/insured. There are only 12 offices of ombudsman in country. Offices of Ombudsman are located in the following cities:Ahemdabad, Bhopal, New Delhi, Mumbai, Chennai, Hyderabad,

Bhubneshwar, Lucknow, Kolkata, Ernakulam, Guwahati, Chandigarh.

Appointment of Insurance Ombudsman : The governing body of insurance council issues orders of appointment of the insurance Ombudsman on the recommendations of the committee comprising of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a representative of the Central Government. Insurance council comprises of members of the Life Insurance council and general insurance council formed under Section 40 C of the Insurance Act, 1938. The governing body of insurance council consists of representatives of insurance companies. Eligibility : Ombudsman are drawn from Insurance Industry, Civil Services and Judicial Services.

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Terms of office: An insurance Ombudsman is appointed for a term of three years or till the incumbent attains the age of sixty five years, whichever is earlier. Re-appointment is not permitted.. Territorial jurisdiction of Ombudsman ; The governing body has appointed twelve Ombudsman across the country allotting them different geographical areas as their areas of jurisdiction. The Ombudsman may hold sitting at various places within their area of jurisdiction in order to expedite disposal of complaints. The offices of the twelve insurance Ombudsmans are located at (1) Bhopal, (2) Bhubaneswar, (3) Cochin, (4) Guwahati, (5) Chandigarh, (6) New Delhi, (7) Chennai, (8) Kolkata, (9) Ahmedabad, (10) Lucknow, (11) Mumbai, (12) Hyderabad. The areas of jurisdiction of each Ombudsman has been mentioned in the list of Ombudsman.

Office Management : The Ombudsman has a secretarial staff provided to him by the insurance council to assist him in discharging his duties. The total expenses on Ombudsman and his staff are incurred by the insurance companies who are members of the insurance council in such proportion as may be decided by the governing body. Removal from office : An Ombudsman may be removed from service for gross misconduct committed by him during his term of office. The governing body may appoint such person as it thinks fit to conduct enquiry in relation to misconduct of the Ombudsman. All enquiries on misconduct will be sent to Insurance Regulatory and Development Authority which may take a decision as to the proposed action to be taken against the Ombudsman. On

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recommendations of the IRDA, the Governing Body may terminate his services, in case he is found guilty.

Power of Ombudsman : Insurance Ombudsman has two types of functions to perform (1) conciliation, (2) Award making. The insurance Ombudsman is empowered to receive and consider complaints in respect of personal lines of insurance from any person who has any grievance against an insurer. The complaint may relate to any grievance against the insurer i.e. (a) any partial or total repudiation of claims by the insurance companies, (b) dispute with regard to premium paid or payable in terms of the policy, (c) dispute on the legal construction of the policy wordings in case such dispute relates to claims; (d) delay in settlement of claims and (e) non-issuance of any insurance document to customers after receipt of premium. Ombudsman's powers are restricted to insurance contracts of value not exceeding Rs. 20 lakhs. The insurance companies are required to honour the awards passed by an Insurance Ombudsman within three months. Manner of lodging complaint : The complaint by an aggrieved person has to be in writing, and addressed to the insurance Ombudsman of the jurisdiction under which the office of the insurer falls. The complaint can also be lodged through the legal heirs of the insured. Before lodging a complaint: i) the complainant should have made a representation to the insurer named in the complaint and the insurer either should have rejected the complaint or the complainant have not received any reply within a period of one month after the concerned insurer has received his complaint or he is not satisfied with the reply of the insurer.

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ii) The complaint is not made later than one year after the insurer had replied. iii) The same complaint on the subject should not be pending with before any court, consumer forum or arbitrator. Recommendations of the Ombudsman : When a complaint is settled through the mediation of the Ombudsman, he shall make the recommendations which he thinks fair in the circumstances of the case. Such a recommendation shall be made not later than one month and copies of the same sent to complainant and the insurance company concerned. If the complainant accepts recommendations, he will send a communication in writing within 15 days of the date of receipt accepting the settlement. Award : The ombudsman shall pass an award within a period of three months from the receipt of the complaint. The awards are binding upon the insurance companies. If the policy holder is not satisfied with the award of the Ombudsman he can approach other venues like Consumer Forums and Courts of law for redressal of his grievances. As per the policy-holder's protection regulations, every insurer shall inform the policy holder along with the policy document in respect of the insurance Ombudsman in whose jurisdiction his office falls for the purpose of grievances redressal arising if any subsequently. Steady increase in number of complaints received by various Ombudsman shows that the policy-holders are reposing their confidence in the institution of Insurance Ombudsman.

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TYPES OF OMBUDSMAN

BANKING OMBUDSMAN

INSURANCE OMBUDSMAN

S.E.B.I OMBUDSMAN

TYPES OF OMBUDSMAN
INCOME TAX OMBUDSMAN ELECTRICITY OMBUDSMAN

TELECOM OMBUDSMAN

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Banking Ombudsman : The Reserve Bank of India (RBI) first introduced the Banking Ombudsman Scheme In1995, which has been revised in 2002 and 2005. The latest revised Scheme has come into force from 1stJan 2006.

S.E.B.I. Ombudsman : The Securities Exchange Board of India (SEBI) under section 30 read with sub-section section (1) of section 11 of the SEBI Act, 1992, has framed fram the SEBI (Ombudsman) Regulations, 2003, which were notified on 21st August 2003. The

Regulations provided for the establishment of the office of Ombudsman to redress the Grievance of investors in securities and connected matters. The listed companies and d registered stock

intermediaries have to disclose the name address and other particulars of ombudsman in their for the benefit of the investors.

Electricity Ombudsman : The Electricity Regulatory Commission, under section 181 read with sub-section sub (5) of f section 42 of the Electricity Act, 2003, issues guidelines for establishment of forum and Ombudsman for redressal of grievances of Electricity consumers. The Delhi Regulatory Commission (DERC) vide its Notification dated 11th March, 2006 has issued DERC (Guidelines for establishment of Forum of redressal of grievance of the consumer and Ombudsman) Regulations, 2003. It may be noted that the Ombudsman is the APPELLATE Authority

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under the Electricity Act2003, and the DERC Regulations, 2003 and therefore an electricity consumer has to first approach the Consumer Grievance Redressal Forum established under the DERC Regulations, 2003.

Telecom Ombudsman : The Telecom Regulatory Authority of India Act, 1997, empowers the Telecom Regulatory Authority of India Ac Act t 1997, empowers the Telecom Regulatory Authority of India (TRAI) to make the recommendations on laying down the standards of quality of services to be provided by the services providers and conduct the interest of the periodical surveys of Telecom service services s so as to protect the interest of the consumers. The telecom operators frequently threaten to disconnects the phones and with draw the numbers given t o subscribers if the deadline for payment is missed by a day or there is miscalculation of the tiniest a amount. mount. The TRAI is, however, neither empowered to look into the grievances of individual customers nor take action against the operators who do not meet quality of standards As there is no specialized body to redress the grievance of telecom customers, they y have to approach consumer forum setup under THE Consumer Protection Act, 1986, or civil courts for Resolutions adjudication of disputes.

Income Tax Ombudsman : The government is considering creating an office to of Income Tax

Ombudsman

protect

individual

taxpayers right. The Ombudsman will identify issues that increase the

compliance burden or create problems for taxpayers and bring those issues to the

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attention of the ministry of Finance. The Ombudsman will make appropriate legislative proposal where necessary and send periodical reports to the Department of Revenue, suggesting appropriate action. It is proposed to initially setup offices of Ombudsman at Delhi, Mumbai, Kolkata and Chennai.

Insurance Ombudsman : The Government of India, Minister of Finance, Department of Economics Affairs, Insurance Division under section 114 (1) of Insurance Act, 1938, has framed the Redressal of Public Grievance Rules, 1998, , Insurance for appointment of

Ombudsman,

which

comes into force with effect from 11th November 1998. The Insurance Ombudsman has started functioning from 1999, provide for efficient, cost effective and impartial settlement of claims and grievance of any person against a Life r General Insurance in Public and private sector. The meaning of expression any other person is wider than consumer and therefore, even third party having grievance with respect to an Insurance contract can approach the Ombudsman Ombudsman.

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PROCESS OF IRDA ON OMBUDSMAN :

If your insurance company does not resolve your complaint to your satisfaction you can escalate your complaint to IRDA. If your complaint is suitable for taking to the Insurance Ombudsman IRDA will help you resolve it by taking it up with the insurance company. For disputes where enquiryor adjudication are required you should approach the Consumer Forum or Courts.

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LOCATION OF OFFICE AND TEMPORARY HEADQUARTERS

The office of the Insurance Ombudsman shall be located at such places as may be specified by the IRDA.

2) In order to expedite disposal of complaints, the Insurance Ombudsman may hold sittings at such places within his area of jurisdiction as may be considered necessary and proper by him in respect of a complaint or reference before him.

JURISDICTION, POWERS AND DUTIES OF INSURANCEOMBUDSMAN

POWERS AND JURISDICTION

1) The IRDA shall specify the territ territorial orial limits to which the authority of each Insurance Ombudsman appointed under Clause 4 of the Scheme shall extend.

2) The Insurance Ombudsman shall receive and consider complaints relating to the deficiencies in Insurance or other services filed on the grounds mentioned in clause 8 and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the concerned and the aggrieved parties or by passing an Award in accordance with the Scheme.

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3) The Insurance Ombudsman shall exercise general powers of super intendance and control over his Office and shall be responsible for the conduct of business thereat.

4) The Office of the Insurance Ombudsman shall draw up an annual budget for itself in consultation with IRDA and shall exercise the powers of expenditure within the approved budget on the lines of IRDA of India Expenditure Rules, 2005.

5) The Insurance Ombudsman shall send to the Governor, IRDA, are port, as on 30th June every year, containing a general review of the activities of his Office during the preceding financial year and shall furnish such other information as the IRDA may direct and the IRDA may, if it considers necessary in the public interest so to do, publish the report and the information received from the Insurance Ombudsman in such consolidated form or otherwise as it deems fit.

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OMBUDSMAN WILL & WONTS

THE OMBUDSMAN WILL.

Listen to you Answer your questions Analyze your situation Explain university policies Provide information and advice Suggest appropriate referrals Assist you in pursuing a resolution Recommend changes in policies and procedures

THE OMBUDSMAN WONT.

Does not conduct formal investigations Does not change rules, policies, or procedures Does not participate in any formal hearing or grievance process Does not supersede the authority of other university officials Does not disclose and may not be required to disclose information provided in confidence, except to address an imminent risk of serious harm where there is no other option.

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LITERATURE REVIEW

The number of studies has been conducted regarding the services of Insurance ombudsman to their customers. Aparna Meduri (2006) argues that the Insurance Ombudsman under the Insurance Ombudsman Scheme and the Consumer Redressal Authorities under the Consumer Protection Act both redresses the cases on deficiency of Insurance service. However, there exists a difference both in terms of redressal machinery and the procedure for

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redressal and makes an attempt to give out the reasons why most of the aggrieved customers prefer to take shelter under the Consumer Protection Act instead of under their Insurance Ombudsmen Scheme, and finally the proposed remedy for it. Chatterjee (2007) critically evaluated various schemes of Insurance ombudsman schemes in operation from time to time. Singh (2006) found that majority of respondents (63%) surveyed had no knowledge about the ombudsman scheme irrespective of their s and none of the surveyed respondents had ever filed a complaint with ombudsman. Khan (2010) suggested that attempts should be made to increase the instances of disputes being resolved by mediation/conciliation rather than by awards. Further, in the event, if ombudsman has to give an award; it must be made final and binding on the parties with only single appeal allowed to a higher court of law. As far as performance of ombudsman is concerned no exhaustive study has been conducted so far.

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CONSUMER PROTECTION ACT 1986

The consumer protection Act, 1986 is the history of socio socio-economic economic legislation in the country. It is one of the most progressive and comprehensive piece of legislations enacted for the protection of consumers. It was enacted after in in-depth depth study of consumer consume protection laws in a number of countries and in consultation with representatives of consumers, trade and industry and extensive discussions within the Government. The Aim of Consumer Protection Act (CPA) is to address the grievances of the consumers and d protecting them from the unethical practices/ behavior or unfair trade practices of the manufacturer/ supplier. All the provisions of the Act have come into force from 1 July 1987. The Act was amended in 1991 and 1993. To make the Consumer Protection Act more functional and purposeful, a comprehensive

amendment was carried out in December 2002 and brought into force from 15 March 2003. As a sequel, the Consumer Protection Rules, 1987 were also amended and notified on 5 March 2004.Earlier though there wer were e several legislations to protect the consumer, but the same never proved adequate to protect consumer and compensate them for their compliances. The act not only enhances the awareness and educate the consumer but also provide compensation to them by summ summary ary and inexpensive proceedings. Unlike existing laws which are punitive or preventive in nature, the provisions of this Act are compensatory in nature. The act is intended to provide simple, speedy and inexpensive redressal to the consumers' grievances, a and nd relief of a specific nature and award of compensation wherever appropriate to the consumer. It confers upon consumers eight

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rights i.e.: basic needs, safety, information, choice, representation, redress, consumer education, healthy environment. It provi provides des remedies to the aggrieved customer in form Replace, Remove, Refund, Redress.

CONSUMER : Consumer means any person who, who,-Buy Buy any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred rred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose, or Hires any services for a

consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes s any beneficiary of such services other than the person who

hires the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first rst mentioned person.

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INSURANCE OMBUDSMAN

Remedies Granted under the Consumer Protection Act, 1986 against unfair Trade Practices.

The District Forum / State Commission / National Commission may pass one or more of the following orders to grant relief to the aggrieved consumer :-

1. To remove the defects pointed out by the appropriate laboratory f r o m goods in question; 2. To replace the goods with new goods of similar description which s h a l l b e free from any defect? 3. To return to the complainant the price, or, as the case may be, the c h a r g e s paid by the complainant; 4. To pay such amount as may be awarded by it as compensation to t h e consumer for any loss or injury suffered by the consumer due to negligence of the opposite party; 5.To remove the defects or deficiencies in the services in question; 6. To discontinue the unfair trade practice or the restrictive trade p r a c t i c e o r not to repeat them; 7. N o t t o o f f e r t h e h a z a r d o u s g o o d s f o r s a l e : 8. To withdraw the hazardous goods from being offered for sale

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INSURANCE OMBUDSMAN

9. To cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature; 1 0 . To pay such sum as may be determined by it if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently: 1 1 . To issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement; 1 2 . To provide for adequate costs to parties.

RIGHTS OF CONSUMERS

Right to Safety Right to Information Right to Redress Right to Consumer Education Right to Basic Needs Right to Safe Environment Right to Choice Right to be Heard

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INSURANCE OMBUDSMAN

Right to Safety : The right to be protected against the marketing of goods and services which are hazardous to life and property Consumer right to safety applies to all possible consumption patterns and to all goods and services. In the context of the new market economy and rapid technological advances affecting the market, the right to safety has become a pre-requisite quality in all products and services. For e.g. some Indian products

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INSURANCE OMBUDSMAN

carry the ISI mark, which is a NB symbol of satisfactory quality of a product? Similarly, the FPO and AGMARK symbolize standard quality of food products.

Right to Information : Right to information means the right to be given the facts needed to make an informed choice or decision about factors like quality, quantity, potency, purity standards and price of product or service. The right to information now goes beyond avoiding deception and protection against misleading advertising, improper labeling and other practices. For e.g. when you buy a product or utilize a service, you should be informed about; a) How to consume a product. b) The adverse health effects of its consumption. c) Whether the ingredients used are environment- friendly or not etc.

Right to Redress : The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers. It is to protect consumer interests that consumers have been given the right to obtain redress. In India, we have a redress machinery called Consumer Courts constituted under the Consumer Protection Act (1986), functioning at national state and district levels. But it has not been made complete use of under due to lack of awareness of basic consumer rights among consumers themselves. While in the developed world, right to redress is perhaps the most commonly exercised consumer right, in developing countries, consumers are still wary of getting involved in legal redress system. There are consumer courts in India where any consumer can lodge a case if s/he thinks he or she has been cheated.

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INSURANCE OMBUDSMAN

Right to Consumer Education Consumer education empowers consumers to exercise their consumer rights. It means the right to acquire the knowledge and skill to be informed consumer throughout life. The right to consumer education incorporates the right to the knowledge and skills needed for linking action and influences factors which affect consumer decisions. It is the single most powerful tool that can take consumers from their present disadvantageous position to one of strength in the marketplace. Consumer education is dynamic, participatory and is mostly acquired by hands-on and practical experience.

Right to Basic Needs This right is the right to basic goods and services which guarantee dignified living. It includes adequate food, clothing, health care, drinking water and sanitation, shelter, education, energy and transportation. Access to food, water and shelter are the basis of any consumer's life. Without these fundamental amenities, life cannot exist. The right to basic needs means that availability of articles which are the basic need of every consumer must be ensured.

Right to Safe Environment It means the right to a physical environment that will enhance the quality of life. It includes protection against environmental damage. It acknowledges the need to protect and improve the environment for future generations as well. This right involves protection against environmental problems over which the individual consumer has control. It acknowledges the need to protect and improve the environment for present and future generations.

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Right to Choice : The right is to be assured, wherever possible, access to a variety of products and services at competitive prices. It means the right to have access to a variety of products and services at competitive prices and in the case of monopolies, to have an assurance of satisfactory quality and service at a fair price. The right to choose has been reformulated to read: the right to basic goods and services. This is because the unrestrained right of a minority to choose can mean for the majority a denial of its fair share.

Right to be Heard : This means the right to be represented so that consumers interests receive full and sympathetic consideration in the formulation and execution of economic policy. This right is being broadened ned to include the right to be heard and represented in the development of products and services before they are produced or set up; it also implies a representation, not only in government policies, but also in those of other economic powers.

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PROCEDURE FOR FILLING COMPLAINT

If within 30 days of lodging the complaint with the IRDA, if you do not get a satisfactory response from IRDA or Insurance company and you may approach Insurance Ombudsman.

IMPORTANT POINTS : Before Filling A Complaint

1- The Insurance Ombudsman will not accept your complaint until you have first filed a complaint with IRDA. IRDA will not accept your complaint until you have first filed a complaint with your Insurance Company. 2- Please note that all complaints have to be clearly marked as complaint and should not be mere request. 3- You must file the complaint with the ombudsman within a year of the rejection of your claim by the insurer. 4- The ombudsman intervenes only if you've not moved any court or approached a consumer forum. 5- Ombudsman's powers are restricted to insurance contracts of value not exceeding Rs. 20 lakhs.

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At what Stages we can File Comlpaint :

(i)

The complainant should have made a representation to the insurer named in the

complaint and the insurer either should have rejected the complaint or the complainant have not received any reply within a period of one month after the concerned insurer has received his complaint or he is not satisfied with the reply of the insurer.

(ii) The complaint is not made later than one year after the insurer had replied.

(iii) The same complaint on the subject should not be pending with before any court, Consumer forum or arbitrator.

HOW TO FILE COMPLAINT : There is no prescribed format for filing complaints. All it requires is for you to submit your complaint in writing, stating the facts, with documentary proof to back your claim. If your complaint is taken up, the settlement process will get under way without even requiring your preference

The ombudsman shall pass an award within a period of three months from the receipt of the complaint. The awards are binding upon the insurance companies.

(a) Any partial or total repudiation of claims by the insurance companies, (b) Dispute with regard to premium paid or payable in terms of the policy,

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(c) Dispute on the legal construction of the policy wordings in case such dispute releates to a claim. (d) Delay in Settlement of claims. (e) Non-issuance of any insurance document to customers after receipt of premium.

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Research Methodology

Of the twelve such offices set up all over India,The offices of the Insurance Ombudsman. As many as 100 decisions pronounced by the Ombudsman during the period of two years, namely, the financial years 2008-09 and 2009-10, available in the original files maintained at the office, were scanned and analysed. Due care was taken in selecting the cases so that they pertained to a variety of grievances of the insured consumers, and belonged to both the life insurance and the general insurance products and companies. Only those cases were chosen which involved substantial question of facts and law as contained in the Redressal of Public Grievances Rules, 1998. Thus, the sampling was mainly judgmental in nature.

A majority (59%) of the complaints received by the Ombudsman releating to settlement of claims and remaning 41% complaint releating to premium paid or payable and nonissue of documents after receipts of premium.

Out of the 100 cases decided by the Ombudsman, nearly half (49 per cent) of the complaints were rejected

Disposal of Cases within one to three months basically pertained to either no or inadequate settlement of medi-Claim, disputed premium, or 'misselling'.

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DATA ANALYSIS AND FINDING

Nature of Complaint: The cases handled by the Ombudsman were analysed according to the type.of grievance/complaint involved. The results are given in Table 1.

NATURE OF COMPLAINT RECEIVED BY OMBUDSMAN As shown in Table 1, a majority (59%) of the complaints received by the Ombudsman pertained to the repudiation of claims by insurance companies. The insurance claim was found to be partially repudiated in 10 (17%) of the 59 cases of repudiation. The next major type of grievance was the delay in settlement of claims (17 %) including the grievance of non-payment of interest on the delayed settlement.

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ORDER PASS BY OMBUDSMAN The nature of order passed by the Ombudsman, that is, whether the complaint was accepted or rejected, or whether the case was closed before the hearing took place.

Nature of Order
Complaint Accepted Wholly Partly Complaint Rejected Complaint Closed 37 32 5 49 14

No. of Cases
37 32 5 49 14

As shown in the tasble out of the 100 cases decided by the Ombudsman, nearly half (49percent) of the complaints were rejected. A little over one-third (37 per cent) of the complaints were up held. Thus, in a larger number of cases, the Ombudsman's decision was in favour of the insurance company. 14 per cent of the cases decided were those which were declared as closed (nolocontender, meaning no contest) on the mutual settlement between the parties. Among the cases so closed, the practice of mutual settlement was followed in a large majority (71.4 per cent) of cases of these public-sector companies than in their counterpart in the private sector.Such mutual settlement was effected either before the fixation of the first date of hearing or soon after the notice was served on the insurance company for settlement of the dispute. Even though mutual settlement was effected in only a few cases, the very existence of the Ombudsman system seems to have served a useful purpose of reducing the number of contested cases in the public forums. This finding also confirms the implementation of the statutory provision contained in Rule12(2) of the RPG Rules, 1998, which stipulates that the Ombudsman shall act as a counsellor andmediator in the

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matters which are within his terms of reference and by mutual agreement between the two parties.

Relief Provided to Complainants

The Redressal of Public Grievances (RPG) Rules, 1998 do not provide for any specific relief to the complainant. However, Rule 16 of the these Rules empowers the Ombudsman to award compensation only to the extent of the loss suffered by the complainant as a direct consequence of the insured peril, or for an amount not exceeding Rs. Twenty lakh (including the ex gratia and other expenses), whichever is lower. The extent of relief provided by the Ombudsman to the complainants in the cases decided in their favour is shown in Table.

Relief Provided
Settlement of actual claim 15 only Settlement of actual claim + 16 interest Issue of fresh policy 2

No. of Cases
40.6

% of Total

43.2

5.4 5.4

Directions to the Company's 2 Chief Vigilance Officer Withholding the agent's 1

2.7

renewal commission Refund of Premium paid TOTAL 1 37 2.7 100

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Evidently, in the maximum number (43.2%) of cases decided by the Ombudsman, the relief provided was in the form of settlement of claim and payment of interest on the amount of claim for the period it was due. The interest payable in these cases was generally at the rate of 8 % per annum. In 40.6 % of the cases, only the payment of claim was awarded to the complainant.An order directing the company to initiate punitive action against the erring officials was passed in only 2 cases, which formed 5.4 per cent of the total number of cases. In this respect the provisions contained in clauses (1) and (2) of Rule 16 of the RPG Rules, 1998 seems to have been implemented in the right earnest.

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Time Taken In Dispoal Of Complaints

Where both the parties to the complaint agree to mediation, the Ombudsman is required to give such a recommendation within one month of the receipt of the complaint. However, where no mediation takes place, the Ombudsman has to pass the 'award' within 3 months of the receipt of the complaint. Thus, the maximum time to be taken in finally disposing of a complaint is 3 months. The cases decided by the Ombudsman were examined from the angle of the time taken in their disposal. The results are presented in Table .

Time taken in disposal

Up to 1 month 6 More than 1 month but unto 10 3 months More than 3 months but up 21 to 6 months More than 6 months but up 24 to 1 year More than 1 year but up to 37 2 years More than 2 years 2 Total 100

No. of cases
6 10

21

24

37

2 100

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ANALYSIS OF LIFE INSURANCE AND NON-LIFE INSURANCE GREIVEANCE (2012-13)

Life Grievances Analysis

When any consumer complains to his insurance company, or directly to IRDA, IRDA's Consumer Affairs Department monitors it closely until resolution. Here is an analysis of consumer complaints about life insurance and the progress made in resolving them.

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Non-Life Grievances Analysis When any consumer complains to his insurance company, or directly to IRDA, IRDA's Consumer Affairs Department monitors it closely until resolution. Here is an analysis of consumer complaints about non-life insurance and the progress made in resolving them.

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CONSUMER OMBUDSMAN

GREIVANCES

REDRESS

BY

INSURANCE

The scheme of Insurance Ombudsman has been provided under the Redressal of Public Grievances Rules, 1998 (RPG Rules), formulated by the Government of India under the Insurance Act, 1938. These Rules which apply to all insurance companies (general insurance as well as life insurance business) provide for the mechanism for resolution of complaints relating to the settlement of claims on the part of insurance companies in a 'cost-effective, efficient and impartial manner' (Rule 2). Insurance companies belonging to both public and private sectors are covered by these Rules. In pursuance of these Rules, the Government of India appointed the Insurance Ombudsman and this institution started functioning in 1999. An Ombudsman is appointed from amongst persons havingrelevant experience or exposure to industry, civil, administrative, or judicial services. On October15, 2008, there were 12 Insurance Ombudsman centres, covering all parts of the country, withspecific territorial jurisdiction, and located at Ahmedabad, Bhopal, Bhubaneshwar, Chandigarh,Chennai, Delhi, Guwahati, Hyderabad, Kochi, Kolkata, Lucknow, and Mumbai.

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Process of Grievance Redress by Ombudsman

The process of consumer grievance-redress before the Insurance Ombudsman is shown in Figure 1.The major steps involved in the CGR process are briefly described below. i) Nature of Complaint: The complainant must specify the facts which have given rise to thecomplaint, the nature and extent of the loss caused to him, and the relief sought from theOmbudsman (Rule 13). Complaints of the following types come within the purview of the

Insurance Ombudsman: 1. Any partial or total repudiation of claim by an insurer; 2. Any dispute regarding the premium paid, or payable, in terms of the policy; 3. Any dispute on the legal construction of the policy in relation to a claim; 4. Delay in the settlement of claim; and 5. Non-issuance of any insurance document to the customer, after the receipt of premium

ii) Filing of Complaint: Any person who has any grievance against an insurer can either himself or through his legal heir, make a written complaint, to the within whose

jurisdiction the branch or the office of the insurer concerned is located. While filing a complaint to the Insurance Ombudsman, the consumer must make sure of the following: 1. A written representation has been made to the insurer which (i) Has been rejected, or

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(ii) Has not been replied to within a month, or (iii) he is not satisfied with the reply; 2. The complaint is made within a year of the disposal of complaint by the insurer; and 3. The complaint is not on the subject-matter, which has been raised before any court, consumer forum, or arbitrator

iii) Hearing by the Ombudsman: The Ombudsman is expected to act as a counsellor and mediator in the matters which are within his terms of reference, and,whenever requested to do so, by mutual agreement, by the insured person and the insurance company. After obtaining full details of the case from the complainant, the comments of the company there on and the reasons why the complainant was not satisfied with the reply received from the company, the two parties are invited for a hearing before the Insurance Ombudsman.Normally, a case is settled in a single hearing. Adjournment is given only in those cases where it is absolutely necessary.

iv) Disposal of the Case: The Ombudsman is required to dispose of the complaint 'fairly and equitably', within a month of receiving the same.

v) Acceptance by Complainant: If the complainant accepts the recommendation of the Ombudsman, he has to communicate his confirmation within 15 days to the Ombudsman, stating clearly that the settlement reached is acceptable to him in totality, in full and final settlement of the claim. After receiving the complainant's acceptance, the insurer is required to comply with the settlement and inform the Ombudsman of the compliance.

vi) Passing of Order and Relief Provided: In the case of non-settlement of the dispute by

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agreement as stated above, the Ombudsman is required to pass an award which he thinks to be 'fair'. The amount of compensation awarded, however, must not exceed Rs.20 lakh, including the ex gratia payment and other expenses (Rule 16(2)). The award has to be passed within three months from the date of receipt of the complaint.

vii) Compliance of Order: As provided under the Rules, if the complainant does not intimate the acceptance, the award need not be implemented by the insurance company. There is no other provision relating to the enforcement or execution of the order passed by the Ombudsman.

viii) Appeal: There is no provision for appeal against the Ombudsman's order.

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CASE STUDIES

1 HDFC LIFE CHEATING ITS INVESTORS With Great grief, agony and sorrow I am writing this mail for taking a severe legal action against HDFC Life for misleading, cheating and looting my money via their Evil(Saving assurance plan: policy12718110) policy schemes .One of their stupid agent came to my office RS Software kolkata 3 years back, advise me to up this policy12718110 for tax savings and other inv investment estment benefits .As i was only interested in short term investment plan , so he requested me to take up this policy in which I have(RS-24000 24000 each) to pay premiums for 3 years and after that can withdraw the net amount with good returns and other benefits. He told that after making payment of 3 premiums can withdraw the money and if i wish then can continue for long term as well. Today when i went to HDFC life office of salt lake branch Kolkata after making payment

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at 3 consecutive years of RS-24,000 each, it came to as surprise and shocked that even I wont be getting Principal amount as return on my investment .CSR of HDFC life told me that this policy cant be surrender as its some kind of bullshit traditional scheme in which I have to keep paying premium till 2019,else I will suffer a loss. He told that the locking period is for 3 years which i have already completed and if i want to surrender this now then I have to go Dalhousie Office and wont be getting even my net invested amount. As these guys freely doing such crime of fraud and looting money from their investors with great confidence by taking full advantage of this lawless corrupt country. Today with great grim I felt that this country is absolutely Lawless which still allowing them to keep going with their fraud businesses to loot and provide mental sufferings to the common consumers and no one is even acting against them from law .Please help on this as I must need to take a strict legal action against them for misleading, cheating and looting me without any reason.. Please act and help on this to fight against the HDFC Life which has given me so much mental suffering and agony with their evil policy schemes.

2 BAJAJ ALLIANZ FRAUD I bought a life insurance policy (policy no. 0182277124) from bajaj allianz on & rs 15000 paid by cash for this policy. That time companys executive told me that you can claim the amount after one year from the date of purchase.

And now company asks me to give two more installments for next 2 year and policy will be mature only after minimum 3 years with three installments of 15000 rs each year. And company is not ready for payment & ignoring to put that policy in process

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3 KOTAK MAHINDRA POLICY FORECLOSURE SCAM

Im really worried and sincerely I have doubt about Kotak Mahindra policy, Look Like its another scam in Indian society. one more thing Kotak Mahindra staff Branch office Agra are very rude and not response properly.

I am living abroad and came to India in 2007, a Kotak Mahindra agent got my information from other sources, I dont know how they got my information and came to my home, they convinced me several time to purchase Kotak Mahindra policy, they shown me some brochures and promised to get interest of invested amount up to 40-50% after 3 years, I saw those document and got trapped, after few days I returned to my residence country and when I tried to contact K.M Agent, I heard they left the Job and after that no information and nothing, after one year, when I got policy value I was shocked it was only 155,000 Rs, However I paid 250,000 Rs for 3 policy, when I search on internet, I found lot of investors cursing and abusing Kotak Mahindra, after that I understand this agent cheated me and thought, its not worthy to renew this policy again. but finally I did for 2 policy and rest one policy of 100,000 rs I forget or you can say I missed, when after 4 years I tried to check the policy value again, there was nothingI contacted them again but they refused to renew the policy of 100,000 rs. they given me an email ID kli.grievance@kotak.com to contact, and I send several emails but no response and nothing Just I got auto respond. Please suggest me, what should I do? they are doing this fraud business on regular basis and no control and nothing?

4. WRONG POLICY ISSUED TO A SENIOR CITIZEN My mother Mrs Savita Mohan was offered a bank account with Bank Of Punjab,Galleria branch,DLF ph 4,Gurgaon with a promise to get all facilites offered including a relationship manager and a facility to get all transactions done at the doorstep.The condition was to either to maintain a FD else to have a AVIVA policy with 50000

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premium to be paid over three consecutive years. After that she would be entitled a double sum on withdrawal basis. Also a sum of 300000rs (3 lacks) assured to the next of The bank manger visited our place and assured her the above. My mother paid the premiums of 50000rs for three installments. Meanwhile the Bank of punjab merged with HDFC bank and we were not left with any clues. After receiving a call fo the 4th installment, while my mother was expecting the full amount of her hard earned money, we came to know that she was mislead and the last day of payment was 08th aug 2032. On asking for a withdrawal only an amount of 55000rs was told. The rest to be deducted as per companys terms and condition.. How can a company sell a policy in the year 2007 to a 59 yr old lady which matures in the year 2032?

5. FRAUD BY KOTAK LIFE INSURANCE A few years back Kotaks employee came to my place to convey me about Kotaks Life Insurance plan. At that time Kotaks employee (Amit Parikh) told me that policy term is for three years and after three years I could withdraw from that policy with full payment based on market/policy performance. For third years installment cheque Kotaks another employee(Hiren Agnihotri) came to my place and got my sign on one paper, when I asked him he told me that it is important to sign on that paper as my third year is over now, But after one year when I checked my bank account I came to know that amount of 20000 has been taken away by Kotak without informing me, when I complained about this to Kotak then then told me that as I had signed on ECS form, it happened, I got into detail of this issue and came to know that his employee got my sign on ECS form when he came to my place to collect third year installment cheque, well I had no idea about

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what is ECS as I have just bank account and nothing else that through which I could get to know about ECS Moreover, at the same time I complained to Kotaks customer service they updated me that I could only withdraw my full amount from that policy after 20 years which was not informed by his employee when I purchased kotaks policy or Kotaks employee updated me false about three years termthis way Kotak does fraud to Indians and making money by any means.

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FIELD STUDY

1)

With whom is a complaint to be lodged?

ANS. A complaint is to be lodged with the Insurance Ombudsman under whose territorial jurisdiction.

2) Does Insurance Ombudsman operate in any territorial jurisdiction?

ANS. Yes. Insurance Ombudsman operates only within the territorial limits.

3) How is this territorial jurisdiction to be applied to complaints?

ANS. The complaint will lie with the Insurance Ombudsman under whose territorial jurisdiction the Branch or Office of the Insurer complained against is located. However, in case of Group Insurance policies, the complaint may be lodged with the Insurance Ombudsman under whose territorial jurisdiction the place of residence of the complainant

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falls.

4) Who can approach Ombudsman?

ANS. Any aggrieved individual who has taken an Insurance Policy on personal lines (or if deceased, the legal heir(s) under such policy) can approach Ombudsman.

5) What are the complaints that are entertained by the Ombudsman?

ANS.

Complaints pertaining to repudiation of claims totally or partially, delay in

settlement of claims, any dispute on the legal construction of the policies in so far as such disputes relate to claims, disputes regarding premiums paid / payable and non-issue of insurance documents.

6) How is the complaint to be lodged?

Ans The Complaint is to be made in writing and may be lodged through personal approach or through post / fax / email(followed by hard copy).

7) Is there any time limit to approach the Ombudsman?

Ans Yes. Within one year of the rejection by the insurer of the representation of the complainant or the Insurer's final reply to the representation.

8) Is there any maximum limit for the amount under dispute that can be entertained by the Ombudsman?

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Ans

Yes. The maximum limit for the amount under dispute for which the Ombudsman

can entertain a complaint is upto Rs. 20 lakhs.

10) What are the pre-requisite conditions in short, for lodging a complaint?

Ans

The complaint must be by an individual on a Personal Lines insurance and

within the terms of reference of the Insurance Ombudsman as set out under FAQ 6.

2. A representation should stand made to the Insurance Company and either an unsatisfactory reply should have been received or the representation should stand unreplied for at least 1 month.

3. The complaint must be lodged within 1 year of the events mentioned in b. above

4. The total relief sought must be within an amount of Rs.20 lakhs.

5. The subject matter of the complaint should not currently be or have earlier been before a Court/Consumer Forum.

11) Should a complainant approach the Ombudsman through a lawyer?

Ans

Not necessary, as formal court procedures are not involved.

12) Are there any fees / charges payable for lodging a complaint?

Ans

No fees / charges are required to be paid.

13) Can a complaint be lodged against a Private Insurer?

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Ans

Yes. Complaints can be lodged against any Insurer both in Public Sector and

Private Sector in both Life and Non-Life sectors.

14) Are copies of complaints or queries and correspondence related thereto required to be forwarded to the Office of the Governing Body of Insurance Council?

Ans

No. The Ombudsman deals directly with complaint matters.

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CONCLUSION

The insurance ombudsman scheme introduced by the Insurance Regulatory and development authority of India is very useful for the redressal of grievances of the investors. But according to the survey, it is found that many people are not aware about the Insurance Ombudsman. Out of those who are aware, there are very few who approach the Ombudsman for their complaint resolution. The procedure for the complaint solving is lengthy, time consuming and not up to the mark. Currently, the situation is also worse. The lawyers have to be bribed for speeding up the procedure and also not many times is the decision found satisfactory. In its most frequent modern usage, an ombudsman is an official, usually appointed by the government or by parliament but with a significant degree of independence, who is charged with representing the interests of the public by investigating and addressing complaints reported by individuals.

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ANNEXURE
FORM OF COMPLAINT (TO BE LODGED) WITH THE INSURANCE OMBUDSMAN (TO BE FILLED UP BY THE COMPLAINANT)

Please approach your Insurance Company first with the grievance. If you have not received a response or you are not satisfied with the response on your grievance, you may use this form to register the complaint with IRDA. If the complaint is a dispute in regard to premium paid or payable, dispute on policy wording pertaining to claim payment, delay in settlement in claims or non-issue of insurance document the same may be lodged with Insurance Ombudsman. The addresses of the Ombudsmen are available on our website. 1. Name of the complainant: ___________________________ 2. Address of the complainant: ___________________________ ___________________________ ____________________________ 3. E-mail/Telephone/Fax : ____________________________ ____________________________

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_____________________________ 4. Whether Individual /Company: (Please tick) Individual Company/other entities

5. Name of the Insurance Company: ___________________________ 6. Address of the servicing office/branch with office code (if available): ________________________________________ ________________________________________ ________________________________________ 7. Policy number/Proposal deposit number: 8. Claim number: 9. Is your complaint related to (please tick the appropriate box) Conventional Life Insurance Policy Unit Linked Life Insurance Policy Pension Policy Health Insurance Policy Group Insurance Policy Others

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10. Nature of complaint: (Please tick the appropriate box)

a. Purchase of policy requested

Plan & Term of the policy differ from what is

Mis-sale/Mis-representation/Tampering in proposal b. Issue of policy Acceptance of proposal related complaints Non-refund of excess proposal deposit

Communication of decision on proposals not done within 15 days of receipt Non-receipt of Policy Bond Refund on Free-look Error in Policy Schedule and Documents c. Policy Servicing Cancellation of policy other than Free-look

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Response for recording Change of address is not sent within 10 days from receipt of communication Response for noting a new nomination or change of nomination is not done within 10 days from receipt of communication Response for noting an assignment is not sent within 10 days from receipt of communication Response for information of current status of policy is not sent within 10 days from the receipt of communication Response for issuance of an endorsement under the policy (noting a change in sum assured etc.) is not sent within 10 days from the receipt of communication Response for issuance of duplicate policy is not sent within 10 days from the receipt of the communication Payment of premium (ECS, Online payment, non-acceptance by company etc.) Delay in adjustment of premium (causing policy lapse, loss of units etc.) Complaints related to improper Allocation of Units NAV related complaints Charges deducted are not as per the policy provision Non-receipt of Premium receipt

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Non-receipt of Duplicate policy Non-receipt of lapse intimation Complaints related to Revival of lapsed policy Complaint related to Assignment of Policy Transfer of policy from one branch to another Complaint on other benefits under the policy other than policy payment (Automatic Premium loan/ premium redirection/conversion option etc.) Complaint on alteration in policy (Rider addition or deletion, change in SA, Change in Premium, Change in mode of payment, change in plan & term etc.) Non-receipt of statement of accounts/ bonus etc. d. Claim Servicing Surrender Value not paid

Payment of less surrender value Queries or requirement of additional document in respect of survival benefit not received within 15 days of receipt of the claim request Partial withdrawal benefit is not paid

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Survival Benefit is not paid within 30 days from the date of receipt of all relevant papers Queries or requirement of additional document in respect of Maturity Claim not received within 15 days of receipt of the claim request Maturity claim is not paid within 30 days from the date of receipt of all relevant papers Queries or requirement of additional document in respect of Death Claim not received within 15 days of receipt of the claim request Death claim is not paid within 30 days from the date of receipt of all relevant papers Death claim not paid since investigation is not completed within 6 months from the date of intimation Repudiation of Claim Queries or requirement of additional document for any other claim (Health, Accident Benefit, Disability Benefit or other Riders) is not received within 15 days of the receipt of the claim request Any other claim (Health, Accident Benefit, Disability Benefit or other Riders) is not paid within 30 days from the date of receipt of all relevant papers

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Any other claim (Health, Accident Benefit, Disability Benefit or other Riders) is not paid since investigation is not completed within 6 months from the date of intimation Complaint related to Payment of Annuity installments Response for processing and Payment of Policy Loan is not sent within 10 days from receipt of the communication The amount of claim is not correct (Bonus, Sum Assured etc. ) Non-payment of penal interest for delayed policy payments e. Other issues Advertisement related complaint Complaint against Agent Malpractices by the employees of the insurer Repeated and unwanted tele-calls from the company - Do not Call Register Any other complaint related to Policy (Details of complaint is compulsory)

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10. Details of complaint (including details of document copies attached): _______________________________________________________ ____________________________________________________________ _____________________________________________________________ _______________________________________________________ _______________________________________________________ SIGNATURE: ________________________ DATE:

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WEBLOGRAPHY

SITES :

www.irdaindia.com www.gbic.co.in www.irdaindia.org/ins www.policyholder.gov.in www.iombudsman.org

BOOKS REFERD :

Principles and Practise of Banking and Insurance (PPBI).

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