The Insurance Ombudsman Scheme is a mechanism for resolving complaints and disputes between customers and insurance companies in an impartial and efficient manner. The scheme was introduced in India in 1998, and it provides a free and accessible dispute resolution process for policyholders who have been unable to resolve their complaints through the regular grievance redressal mechanism of the insurance company.
Here are some key features of the Insurance Ombudsman Scheme:
- Independent authority: The Insurance Ombudsman is an independent authority appointed by the Insurance Regulatory and Development Authority of India (IRDAI). The Ombudsman is responsible for handling complaints and disputes between policyholders and insurance companies in a fair and impartial manner.
- Free of cost: The services of the Insurance Ombudsman are provided free of cost to the policyholder. This makes the scheme accessible to a wide range of policyholders who may not have the resources to pursue legal action or other dispute resolution mechanisms.
- Jurisdiction: The Insurance Ombudsman has jurisdiction over complaints and disputes involving insurance policies that fall within the purview of the IRDAI. This includes life insurance, health insurance, and general insurance policies.
- Time-bound resolution: The Insurance Ombudsman Scheme provides for a time-bound resolution of complaints and disputes. The Ombudsman is required to pass an award within three months of receiving the complaint, and the award is binding on the insurance company.
- Non-adversarial process: The Insurance Ombudsman Scheme is designed to be a non-adversarial process. The Ombudsman is empowered to use conciliation and mediation to resolve disputes, and the emphasis is on finding a mutually acceptable solution rather than a win-lose outcome.
- Appeals process: If either party is dissatisfied with the award of the Insurance Ombudsman, they can appeal to the appellate authority, which is a committee appointed by the IRDAI. The decision of the appellate authority is final and binding.
Overall, the Insurance Ombudsman Scheme provides a useful mechanism for resolving complaints and disputes between policyholders and insurance companies in an efficient and impartial manner. The scheme is free of cost and accessible to a wide range of policyholders, and it provides for a time-bound and non-adversarial process. However, it is important to note that the Insurance Ombudsman Scheme is not a substitute for taking adequate precautions when purchasing an insurance policy, and policyholders should carefully read and understand the terms and conditions of their policy before making a claim.