Union Government amends “Insurance Ombudsman Rules – 2017”

With the objective of improving the working of “Insurance Ombudsman mechanism”

• The Union Government notified comprehensive amendments to the Insurance Ombudsman Rules, 2017
• It is with a view to improve the effectiveness of the working of the Insurance Ombudsman mechanism
• It is to facilitate resolution of complaints regarding deficiencies in insurance services in a timely, cost-effective and impartial manner

Key points of the amendments

• The amendments in the rules have strengthen the scope of the complaints made to the ombudsman from disputes to deficiencies in service at the part of insurers, brokers, agents and intermediaries
• Under the amendments, the insurance brokers have been brought under the supervision of the Ombudsman mechanism. It was done by empowering Ombudsmen in order to pass the awards also against insurance brokers
• Further, the provisions of the timeliness and cost-effectiveness of the mechanism has been strengthened. Policyholders can now make complaints electronically to Ombudsman
• The amended rules also seek to create a complaints management system so as to enable the policyholders to track status of their complaints online
• The rules also provides that, ombudsman can use video-conferencing to hear the cases
• In case there is vacancy in office of any particular Ombudsman, then to enable access to relief under the Ombudsman mechanism additional charge will be given to another Ombudsman
• As per the amendment, selection committee will now comprise of an individual having a track record of promoting the consumer rights or is advancing cause of consumer protection in insurance sector
• Under the amendments; the Executive Council of Insurers, who manages the ombudsman mechanism, have been renamed as Council for Insurance Ombudsman

Other highlights from the Government

• Under the amended rules, the timeliness and cost-effectiveness of the mechanism has been substantially strengthened
• Policyholders will now be enabled for making complaints electronically to the Ombudsman and a complaints management system will be created to enable policyholders to track the status of their complaints online
• Further, the Ombudsman may use video-conferencing for hearings. To enable access to relief through the Ombudsman mechanism even when there is vacancy in the office of a particular Ombudsman, provision has been made for giving additional charge to another Ombudsman, pending the filling of the vacancy
• A number of amendments have been made for securing the independence and integrity of the Ombudsman selection process, while also building in safeguards to secure the independence and impartiality of the appointed persons while serving as Ombudsmen
• Further, the selection committee will now include an individual with a track record of promoting consumer rights or advancing the cause of consumer protection in the insurance sector What is an insurance ombudsman?

Policy and Economy