A chain of grievance redressal systems is in place to handle all kinds of policyholder issues
DELHI resident Vipin Arora had taken three life insurance policies from a well-known private life insurer in 2008 for a total premium of Rs 1,50,000 per annum and kept paying the premium for two years.
In February 2010, he paid the third annual premium to the insurer through a cheque, but the same was not encashed. On enquiry, he got a rude shock as the insurer told him that his policies had been suspended and that the same can be reinstated only after his medical examinations, which have been pending.
Vipin went through the medical tests in July 2010, but in August the insurer told him that he would need to undergo more tests. Hassled, he asked the insurer to cancel the policy.
Vipin was an aggrieved customer, who was unaware of the process for insurance policyholders' grievance redressal. Each insurance company has a grievance cell and existing procedures require the aggrieved policyholder to approach it first.
Once the complaint is registered, the insurer must give the policyholder a complaint number and intimate the time required to resolve the issue. Some insurers use an escalation model for grievance redressal, so that the issues are resolved internally.
In this model, the executive first contacts the policyholder to try and understand the nature of the problem and, if possible, address the grievance. But if the problem persists, grievance officers and chief grievance redressal officer of the company get involved and try to sort out the issue.
The Insurance Regulatory and Development Authority (Irda) has stipulated a two-week timeframe for insurers to resolve all kinds of customer complaints. In case the policyholder feels that the insurer has not addressed the issue to satisfaction, s/he can approach Irda grievance cell, which was set up in June 2010 to safeguard policyholders from insurance frauds.
The Irda grievance cell handles claims only from the insured or claimants relating to servicing of policy documents, claim proceedings or misselling and does not have the power to pass judgements on any dispute over claims or policy terms. To raise any dispute over claim settlement, a customer needs to approach the judicial body of Irda, which is the insurance ombudsman.
We can expect the number of pending cases of customer grievances to drop further due to the stringent measures being enforced by both Irda as well as insurers.
With the new guidelines on outsourcing and individual agents, insurers are going that extra mile to ensure that there is no compromise on the service aspect.
The insurance ombudsman appointed by Irda has the legal authority to pass judgements in cases where the customer is not satisfied with the claim amount or the time taken to settle a claim, or where the policy is not issued within the stipulated time or in disputes about the claiming process itself.
If an aggrieved party is not satisfied with the decision of the ombudsman, s/he has the right to move a higher court such as consumer forums and judicial courts.
Better customer service has to be a way of life for the insurance industry. Furthermore, insurance companies have to be quick and responsive when a customer complaint comes in. Points to remember Your life insurer must revert to you in case of any query within 15 days of receiving a claim Any supporting documents or medical reports if needed should be asked for at one go Once relevant papers are submitted, the insurer must clear the claim or dispute it in 30 days Cases where an investigation is required, the investigation must be completed in 6 months Claim payment must earn interest equal to bank savings rate in case of dispute over beneficiary
