How Grievance Redressal for Insurance Policies works

Be it any private or public sector company, these days every organization lays great emphasis on managing grievances or complaints. In fact, it is considered to be the key factor that aids the growth of any business in today’s fast-paced and competitive market. Irrespective of the industry, almost all major regulators have established robust grievance management and redressal mechanisms to safeguard the interests of end customers. As a policyholder, it is imperative for you to understand the workings of the insurance-related grievance redressal system as well as be familiar with the available recourse if the steps taken fail to satisfy them. The Insurance Regulatory and Development Authority of India (IRDAI) is taking severe measures against insurers who flout the laid down procedures. Thanks to this move, the entire redressal framework has now been brought under the radar. The IRDA Protection of Policyholder’s Interests (PPHI) Regulations 2002 is responsible for governing the entire process.

According to this, the insurer needs to end a written acknowledgement to the complainant within 3 working days. This needs to mention the name and designation of the officer in charge of handling the grievance, along with details of the redress process. The maximum time for sorting out the issue is two weeks. If the complaint is rejected within 2 weeks, the insurer should provide adequate reasons for the same and guide the policyholder on the next course of action. If the policyholder does not receive any response from the company, he/she can seek assistance from IRDAI’s call center. Alternatively, you can also register your complaints through the regulator’s Integrated Grievance Management System (IGMS) portal. This online platform that enables customers to lodge and track their complaints online is also equipped enough to generate various analytical reports on customer grievances registered against the insurers. If you are not able to access the insurance company directly, IGMS offers a gateway to register complaints with insurance companies.

The Next Level:

As a policyholder, always remember that your first point of contact should always be the insurer. In case you are not satisfied with the company’s response, consider pursuing the matter with the insurance ombudsman in your city 30 days following the first lodging of your complaint with the insurer. This quasi-judicial body deals with cases up to a value of 20 lakh and is also authorized to give compensation to aggrieved policyholders. The ombudsman primarily plays his role in complaints related to monetary compensation. However, according to some consumer activists, the ombudsman framework has not proved to be as beneficial as it was expected to be. They are of the opinion that the framework sounds good theoretically, but is not effective enough. The grievance cell often overlooks or neglects the complaint, or forwards the grievance to the divisional office. Following this, it communicates the same response to the insured.

Final Recourse:

If you are a policyholder, you should bear in mind that consumer courts are your last resort. There is no need to go to the ombudsman before approaching consumer courts; on the contrary, you can do so directly. According to consumer activists, going to consumer courts not only saves time, efforts, and money, but also paves the way for better accessibility, compensation and costs. Consumer forums or civil courts can also prove to be of help if the insurer fails to comply with the Ombudsman’s order or if they are dissatisfied with it.

Recently, IRDA has circulated a depressing note on the rising number of unresolved protests from policyholders, drawing attention to the fact that insurance companies do not resolve complaints in the pre-arranged manner.