Page 47 - The Insurance Times March 2025

Ombudsman

The ombudsman dilemma: Free relief or stacked

deck?

W hen businessman Mukesh Garg's two claims were with the ombudsman. I am in a full-time job. My husband
rejected, he represented himself before the insur-
has health issues. I don't understand insurance. If I sought
ance ombudsman, a statutory body for out-of-court settle- somebody's help in doing the paperwork to ease my bur-
ments, but sought third-party help with the paperwork-a den, why is it wrong?" said a person seeking anonymity as
decision he later regretted. her case is sub-judice.

"Two of my claims got rejected in a year. The ombudsman Consumer policy expert and former member of the insur-
issued an award in my favour in the first one, but when he ance ombudsman advisory committee Bejon Misra said: "In-
found out that a company helped me out, he did not hear surers may not be sending lawyers to the ombudsman's of-
my case and passed an award against me in the second fice, but those representing them before the ombudsman
one." has a rich insurance background and access to lawyers in
the firm or has a legal background. It's a fight between a
Garg's situation highlights a significant challenge in the sys- common man and a large entity. You cannot question com-
tem. While the policyholder and insurance company get a plainants if they seek support from insurance experts. Irdai
chance to present their cases, neither can engage a lawyer (Insurance Regulatory and Development Authority of India)
or third party. must allow representation if complainants want."

For most policyholders, navigating this process can be daunt- The ombudsman's view
ing. After an insurer rejects a claim, a policyholder's first step
Ombudsman officers fear it will hurt the free-of-cost nature
is approaching the insurer's grievance handling department. of the system. "Ombudsman officers are impartial and un-
If the issue is not resolved, they can reach out to the om- derstand that policyholders cannot present their case as
budsman. The hearing date is fixed and both sides present structurally as an insurer will," said R.M. Singh, a former
their arguments either online or physically. insurance ombudsman of Madhya Pradesh and
Chhattisgarh. "People should rely on them. Most complaints
No level-playing field go in the complainants' favour. Lately, it is seen that small
One does not have to pay any fee to lodge a complaint with agencies have mushroomed to assist policyholders for a fee.
the ombudsman. It is a cost-effective system where claims It must not be encouraged because otherwise it would be-
up to Rs. 50 lakh can be resolved. However, people unaware come part of the process and gullible policyholders may be
of its existence or those who do not understand the process taken for a ride by unscrupulous players."
may reach out to third parties seeking support. Ombudsman
officers can't learn about it, but if they do, they may view it Policyholder Arjun Singh trusted the system and approached
in a negative light. the ombudsman. But he was disappointed. "It was appar-
ent that the ombudsman officer was biased towards the
A couple of complainants told Mint they were asked to write representative of the insurer. The ombudsman chief insulted
a letter stating they would not pay money to any third party. me and did not let me speak, and I had to go back and forth
Mint has seen one such copy. for the paperwork with the insurance firm and ombudsman
to get my claim."
"I was told my case is genuine but I still would not get my
claim because I sought an agency's help in filing my case Milind A. Kharat, who worked as an insurance ombudsman

42 March 2025 The Insurance Times