K. SRIDHAR
INSURANCE OMBUDSMAN
CHENNAI
INTRINSIC CHARACTERISTICS OF
INSURANCE CONTRACTS DIFFER
FROM OTHER CONTRACTS
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INSURANCE IS STILL SOLD AND NOT
BOUGHT
PRODUCTS – NOT TANGIBLE – ONLY
PROMISES
AFTER SALES SERVICE
INTRINSIC CHARACTERISTICS OF
INSURANCE CONTRACTS DIFFER
FROM OTHER CONTRACTS

LEVEL OF KNOWLEDGE OF
INSURED/NOMINEE
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LAWS OF LAND
LAWS OF CONTRACT
LAWS OF INSURANCE
INTRINSIC CHARACTERISTICS OF
INSURANCE CONTRACTS DIFFER
FROM OTHER CONTRACTS

CRUCIAL ROLE PLAYED BY
INTERMEDIARIES
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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
WHY AN UMPIRE IS
REQUIRED FOR
RESOLVING INSURANCE
DISPUTES ?
INSURER
STRONG
INSURED/NOMINEE
DATA
AND DOCUMENTATION
WEAK
WELL
VERSED
TECHNICAL TERMS
NO
EXPERIENCE
ONLY AS
ON PAPER
PRE-PROPOSAL
DATA
(TRUE OR FALSE)
FAIRLY WELL
EQUIPPED OF
ALL DETAILS
WHY AN UMPIRE IS
REQUIRED FOR
RESOLVING INSURANCE
DISPUTES ?
OMBUDSMAN
INSURER
1. FRONT OFFICE
2. BACK OFFICE
3. GRIEVANCE OFFICE
INSURED/
NOMINEE
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.
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.
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.
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. Reappointment is not permitted.
Territorial Jurisdiction
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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
Staff
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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.
Staff
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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.
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
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.
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
Consequences of non-acceptance
of award
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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.
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
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No pushing paper vertical/horizontal
SOME STATISTICAL DATA
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2007-08 – 1200 complaints received
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2008-09 - Complaints received till December
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Life: 568; Non-life:527= Total 1095
No. of awards given = Life:35; Non-life:77
Decisions in favour of the company
Life: 17; Non- Life 33
Decisions in favour of the complainant
Life: 18; Non-life 44