Government amends Insurance Ombudsman Rules, 2017

The Union Government has amended the “Insurance Ombudsman Rules, 2017” on March 2, 2021.

Highlights

The ombudsman rules were amended with the objective of improving the working of ‘Insurance Ombudsman mechanism’. This will help in facilitating the resolution of the complaints with respect to the deficiencies in insurance services in a cost-effective and impartial manner on time.

What are those 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.

Who is an ombudsman?

Ombudsman is an official who is appointed to investigate the complaints regarding the service or on an administrative authority. The ombudsman is usually appointed by governments however, the private companies can also appoint them. The Indian government has appointed ombudsman to resolve the grievances with respect to income tax, banking and insurance.

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