Monday, December 12, 2011

Channels to resolve your grievances against insurance companies

Incidents of insurance companies trying to wriggle out of their commitment to the policyholders are not all that rare. In fact, Hollywood has many hits on the subject. Noted consumer activist Jehangir Gai also has a story to tell: “A person had undergone three surgeries simultaneously, with the total cost amounting to Rs 33,000. When the claim was lodged, the insurance company’s TPA held that though the surgeries pertained to three different body parts, they were conducted at the same time and hence, the eligible claim was only Rs 10,000.”Despite explaining that the company would have had to shell out a higher amount had the insured decided to go through the surgeries at different points in time, the company just wouldn’t budge. “Ultimately, we approached the Insurance Ombudsman who held that the eligible claim amount was Rs 30,000,” recounts Mr Gai, who remains indignant about the Rs 3,000 that was waived off.

This doesn’t mean that a policyholder is entirely at the mercy of insurance companies. During the past few months, the insurance sector has witnessed a slew of regulations framed by the Insurance Regulatory and Development Authority (Irda) aimed at protecting the interests of the policyholders. More recently, Irda chairman J Hari Narayan has indicated that the Insurance Ombudsman would be empowered further.

While the process of giving teeth to the ombudsmen may take a while, you can get acquainted with the intricacies of the existing grievance redressal infrastructure and the procedure to be followed to make yourself heard.

Round One: Most companies offer a host of channels – branches, phone call, e-mail as well as snail mail — to policyholders to register their complaints. Typically, you can approach the company’s grievance redressal officer, if you find that the customer service department is not of much help. The insurance companies are required to maintain a well-defined procedure for receiving and resolving grievances at their branches, too.

They 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 the 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 along with the acknowledgement. If not, then 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. Remember, if you 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 resolved.

Round Two:If the redressal officer wasn’t much of a help, then you can approach either Irda’s Grievance Redressal Cell or the Insurance Ombudsman, depending on the nature of your complaint. The offices of the ombudsman are authorised to mediate and, if necessary, award compensation to policyholders. They handle cases involving insurance contracts with a value of up to Rs 20 lakh.The Insurance Ombudsman can make recommendations within one month of the receipt of the complaint. Once you receive a copy of the recommendation, you have to send a written communication indicating your 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 you are not satisfied with the verdict, you can take recourse to consumer forums or civil courts.

So what are the kinds of complaints that can be heard by the ombudsman? The key one relates to rejection (whether partial or total) of claims, in addition to disputes about premiums; policy wordings in case the disputes relate to claims; delay in settlement of claims and non-issuance of any insurance document after collecting the premium.

Irda’s Grievance Redressal Cell: Unlike the ombudsman, this redressal cell does not have the authority to pass orders. However, complaints addressed to the cell are taken up with the insurers. These could include delay or lack of response pertaining to policies or claims and complaints about agents’ conduct.

“Since the awareness about the ombudsman is low, Irda’s campaign (the toll-free number — 155255 — has been publicised widely) has been creating awareness about the recourses available to policyholders. You can approach the cell directly, and where required, you will be redirected to the ombudsman under whose jurisdiction the complaint falls,” informs an Insurance Ombudsman official . You can get in touch with the cell via mail (the e-mail IDs as well as the postal addresses are listed on the Irda website).

Also, ensure that you send your complaint yourself – 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. Therefore, it is imperative to disclose all the details in the complaints registration form available on the insurance regulator’s website.

So though the grievance redressal mechanisms are in place, you need to make sure that you are alert while dealing with insurance companies and follow the procedure laid down for an effective solution to your problem.

Source: economic times

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