Insurance Ombudsman cannot dictate terms of insurance policy renewal, says Court

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The Kerala High Court recently ruled that the Insurance Ombudsman does not have the power to direct an insurance company to renew an insurance policy at a specific premium rate. The Court explained that the ombudsman is only empowered to award compensation to aggrieved complainants, as per Rule 17 of the Insurance Ombudsman Rules, 2017.

The case involved an appellant, NS Gopakumar, who had a medi-claim insurance policy with the Oriental Insurance company. When the appellant sought to renew his policy in 2018, he was informed that the premium payment had been increased. The appellant filed a complaint with the insurance ombudsman, who later directed the insurance company to renew the policy at the original premium rates. However, the insurance company challenged this directive in the Kerala High Court, and a single judge ruled in favor of the insurance company.

The Division Bench of the High Court, comprising Justices A Muhammed Mustaque and Shoha Annamma Eapen, noted that while Rule 13 of the Ombudsman Rules empowers the ombudsman to hear complaints about premium payments, it does not grant the ombudsman the power to dictate the terms of policy renewals. The Court emphasized that the ombudsman’s power is limited to awarding compensation, as stated in Rule 17 of the Ombudsman Rules.

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Therefore, the Court concluded that the insurance ombudsman had exceeded their jurisdiction by directing the insurance company to renew the appellant’s policy at the original premium rates. The Court dismissed the appeal filed by the appellant.

Conclusion

In conclusion, the Kerala High Court ruled that the Insurance Ombudsman does not have the power to issue directions to an insurance company regarding policy renewals. The ombudsman’s authority is limited to awarding compensation to complainants. The Court held that the ombudsman’s directive for the renewal of the appellant’s medi-claim policy at the original premium rates exceeded their jurisdiction.

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