Date:10/10/2005 URL: http://www.thehindubusinessline.com/2005/10/10/stories/2005101001031400.htm

Back Complaints to insurance ombudsmen rising

N.S. Vageesh

Chennai , Oct. 9

COMPLAINTS to the 12 Insurance Ombudsmen in the country are on the rise.

Although set up seven years ago as a "no-cost and expeditious" complaint redress forum for individual policy holders, the ombudsmen are getting more complaints only in the recent past. In 2003-04, they received 9,675 complaints.

In 2004-05, the number rose to 12,281 complaints.

Most complaints are regarding disputes arising out of delay or partial/total rejection of claims.

Occasionally they are also because of disputes on the non-issuance of documents or about the premium amounts.

When seen against the total number of policies issued annually, (about 50 million in the non-life insurance sector and about 28 million policies in the life sector) the number of complaints is but a fraction.

Yet, their increase is partly a sign of improving awareness and partly the impact of the jump in the number of players after the opening up of the insurance sector.

Two dozen companies have come in during the past four years. The complaints seem evenly distributed between the two broad streams — life and non-life. The non-life complaints pertain mainly to mediclaim policies.

The dispute between the insured party and the insurance company is mainly on the issue of non-disclosure of pre-existing illnesses. Mr R.C. Sharma, Insurance Ombudsman in Chennai, says there is often a lack of understanding of the terms of the contract. "In such cases, when the available evidence is not conclusive about pre-existing illnesses, the benefit of doubt goes to the insured."

He says that while hearing mediclaim cases, he insists on the presence of representatives from the insurance company along with the third-party administrator (TPA) who processes the claims. He says that in a number of cases the TPAs were unable to justify their decision to repudiate claims.

He says he now holds the insurer responsible for the decision on mediclaim policies.

Statistics pertaining to the Tamil Nadu region show that about 57 per cent of the awards have went in favour of the insured and the balance in favour of the companies.