Grievance Redressal For Insurance Claims

Your insurance policy can be a boon in a crisis, but problems that crop up during the claims resolution process often cause more trouble than you had bargained for. The apex regulatory body of the insurance sector, IRDA, has provided support at various levels to resolve issues that policyholders may face, says Jay Sampat

Rejection of insurance claims is an oft heard complaint of policyholders. Take the case of my aunt. Her husband underwent three surgeries simultaneously, with the total bill being Rs 155000. When the claim was submitted, the third-party administrator (TPA) said that though the surgeries pertained to different parts of the body, the admissible claim was only Rs 45000 as the surgeries were conducted simultaneously. Her son argued that the company would have had to reimburse a much higher amount had the gentleman undergone three surgeries separately instead, but insurer refused to budge. Ultimately, we approached the Insurance Ombudsman, who held that the eligible claim amount was Rs 132000.

Given the problems that people routinely face while dealing with insurance companies, the Insurance Regulatory and Development Authority (IRDA) has framed additional regulations aimed at protecting the interests of policyholders. While the process of giving the ombudsman more powers will take time, in case you have an emergency and need to claim an amount from an insurance company, here are some of the tips to keep in mind to ensure a speedy claims procedure:

a) Complaints can be registered via branches, phone calls, e-mails and traditional post. If you find that the customer service department is not of much help, you can approach the company’s grievance redressal officer. Insurance companies maintain a well-defined procedure for receiving and resolving grievances at their branches as well.

For all complaints, insurance companies have to specify a time frame within which various types of grievances must be resolved. While the companies can decide the time limit, they are required to send a written acknowledgement within three working days of the receipt of the complaint. Any failure on the part of companies to stick to the deadlines will make them liable to penalties. If the complaint is resolved within three days, the insurance company will have to inform the individual and provide an acknowledgement. If not, the company will have to resolve it within two weeks of receiving the complaint and send a final letter of resolution.

If the insurance company decides to reject the complaint, it has to give a reason along with information on further redressal avenues that the complainant can pursue. On the policyholders’ part, if they do not react within eight weeks from the date of receiving the insurer’s response despite being dissatisfied with it, the company will assume that the complaint has been sorted.

b) If the redressal officer is not able to help, policyholders can approach either the IRDA’s Grievance Redressal Cell or the Insurance Ombudsman, depending on the nature of their complaint. The offices of the ombudsman are authorised to mediate and, if necessary, award compensation to policyholders. Disputes generally relate to rejection (whether partial or total) of claims, premiums, policy wording, delay in settlement of claims and non-issuance of insurance documents after collecting the premium. Cases involving insurance contracts with a value of upto Rs 20 lakh are handled by the ombudsman (the state commission handles cases upto Rs 1 crore and national commission handles cases above Rs 1 crore). The ombudsman, however, does not handle cases dealing with the conduct of agents.

The Insurance Ombudsman can make recommendations within one month of the receipt of the complaint. Once the policyholders receive a copy of the recommendation, they have to send a written communication indicating their acceptance of the settlement within 15 days. If the ombudsman gives a verdict, which has to be delivered within three months, the insurance company has to comply with the order. If the policyholders are not satisfied with the verdict, they can take recourse to consumer forums or civil courts.

c) IRDA’s Grievance Redressal Cell is another forum for the settlement of disputes. This cell, however, does not have the authority to pass orders. Issues addressed include delay or lack of response pertaining to policies or claims and complaints about agents’ conduct. Since the awareness about ombudsmen is low, IRDA has widely publicised its toll-free number. You can also get in touch with the redressal cell via mail as well as via the postal addresses on the IRDA website. One can approach the cell directly, and where required, you will be redirected to the ombudsman under whose jurisdiction the complaint falls.

While addressing a grievance to this forum, remember that the ones forwarded by third parties including lawyers or agents are not entertained by the cell. Similarly, complaints with incomplete information are also not heard.