Govt looks to tweak insurance plaint rules to cut case count


The government is pushing for a number of changes, including higher limitations for the ombudsman, because insurance is the main cause of consumer complaints. This will help to reduce the number of cases. Out of the entire 5. 5 lakh ongoing complaints before consumer commissions, about 1. 7 lakh involve the insurance industry.
The finance ministry and insurance regulator Irdai have been urged to enhance the maximum for the ombudsman above Rs 30 lakh as the bulk of plans, notably in the life insurance category, are higher than the limit. This request follows brainstorming by the department of consumer affairs.
The incapacity of the chosen executives from the corporations to make a decision on the topic has been identified as one of the major weaknesses in the system. They frequently claim that they lack the authority to make decisions that go beyond a certain point, which delays making a decision.

Companies must diminish or do away with the multilayer approach within an organisation, and disagreements must be settled quickly. Excessive delays should be addressed by companies, an official told TOI.

Also, the department of consumer affairs has advocated for disputes worth less than Rs 2 lakh to be settled without lawyers. The effective involvement in Lok Adalats, according to officials, is another technique that should be used to lessen pendency in cases that are still outstanding.

Also, it is hoped that insurers’ sales practises and terms disclosures would be improved, while the industry may be resistant to the effort. Although some private platforms currently do it, there has been a proposal for a system to rate insurance businesses.

According to the government, a high number of conflicts speaks negatively of how businesses and regulators interact with consumers. There is a sense that regulators have overlooked consumer interests in favour of concerns that are thought to be crucial for the industry’s development.