IOR Section 13 : Duties and Functions of Insurance Ombudsman

Explanation using Example

Example 1: Delay in Settlement of Claims

Introduction: Mr. Sharma, a policyholder, filed a claim with his health insurance provider after undergoing surgery. The insurer, however, delayed the settlement of his claim beyond the time specified in the regulations under the Insurance Regulatory and Development Authority of India Act, 1999.

Application: According to Section 13(1)(a) of The Insurance Ombudsman Rules, 2017, Mr. Sharma can file a complaint with the Insurance Ombudsman alleging a deficiency in service due to the delay in claim settlement.

Outcome: If the Ombudsman finds merit in Mr. Sharma's complaint, the insurer may be directed to settle the claim promptly. Non-compliance with the Ombudsman's decision can lead to reputational damage and potential regulatory scrutiny for the insurer.

Conclusion: This example illustrates the importance of insurers adhering to specified timelines for claim settlements to avoid legal complaints and potential penalties.

Example 2: Misrepresentation of Policy Terms

Introduction: Mrs. Kapoor purchased a life insurance policy based on the assurance from the insurance agent that it included a critical illness cover. Upon reviewing the policy document, she discovered that such a cover was not included.

Application: Under Section 13(1)(d) of The Insurance Ombudsman Rules, 2017, Mrs. Kapoor can lodge a complaint with the Insurance Ombudsman for misrepresentation of policy terms and conditions.

Outcome: The Ombudsman may mediate between Mrs. Kapoor and the insurer to resolve the issue, potentially resulting in the inclusion of the critical illness cover or other compensatory measures. Failure to address such misrepresentations can lead to regulatory actions against the insurer or agent.

Conclusion: This scenario highlights the need for accurate communication of policy terms by insurers and their agents to prevent disputes and maintain trust with policyholders.

Example 3: Non-Issuance of Policy After Premium Payment

Introduction: Mr. Verma paid the premium for a health insurance policy but did not receive the policy document even after several follow-ups with the insurer.

Application: As per Section 13(1)(h) of The Insurance Ombudsman Rules, 2017, Mr. Verma can approach the Insurance Ombudsman for non-issuance of the insurance policy after receipt of the premium.

Outcome: The Ombudsman can facilitate the issuance of the policy or provide a resolution that ensures Mr. Verma's rights as a policyholder are protected. Insurers failing to issue policies timely may face penalties or directives to improve their processes.

Conclusion: This example underscores the obligation of insurers to issue policy documents promptly upon receiving premiums to avoid legal challenges and maintain compliance.

Example 4: Dispute Over Premium Amount

Introduction: Ms. Rao noticed a discrepancy in the premium amount debited from her account compared to what was agreed upon in her car insurance policy.

Application: According to Section 13(1)(c) of The Insurance Ombudsman Rules, 2017, Ms. Rao can file a complaint with the Insurance Ombudsman regarding the dispute over the premium paid.

Outcome: The Ombudsman may investigate the discrepancy and mediate a resolution, which could involve refunding the excess amount or adjusting future premiums. Insurers must ensure accurate premium calculations to avoid such disputes.

Conclusion: This scenario highlights the importance of transparency and accuracy in premium calculations to prevent disputes and maintain policyholder satisfaction.