Ombudsman Filing Process

What the Ombudsman is

The Insurance Ombudsman is an office set up under the Insurance Ombudsman Rules, 2017, which replaced the earlier 1998 rules, to resolve complaints against insurers and insurance intermediaries. The process is completely free of cost: there is no filing fee, no hearing fee, and no lawyer is required.

Ombudsman offices across India each cover specific states and territories. The Council for Insurance Ombudsmen publishes the list, and a complainant uses the office whose territory covers the case.

Who can complain, and who cannot

The Ombudsman is open to individuals and to holders of group policies, sole proprietorships and micro enterprises. It hears complaints about personal-lines and group policies and policies issued to sole proprietorships and micro enterprises, brought by the policyholder or their legal heirs, nominees or assignees.

A large company's commercial policy falls outside its scope. Such a company looks to the other routes: a consumer commission where the law permits, the civil courts, or arbitration where it has been agreed.

Conditions before filing

The complainant must first make a written representation to the insurer. The Ombudsman can be approached if the insurer rejects it, gives a reply the complainant is not satisfied with, or does not reply within one month.

There is a time limit. The complaint must be made within one year of the insurer rejecting the representation or giving the unsatisfactory reply. If the insurer does not reply at all, the year runs from the end of the month allowed for its reply.

The same matter must not be before a court, consumer commission or arbitrator. The Ombudsman does not hear a dispute that is pending elsewhere.

Mediation, award and after

The Ombudsman first tries to settle the complaint by mediation. A recommendation reached through mediation takes effect when the complainant accepts it in writing.

Failing that, the Ombudsman passes an award. It is capped at ₹50 lakh, raised from ₹30 lakh by an amendment effective 10 November 2023, and is to be passed within 3 months of receiving all the requirements from the complainant.

The award is binding on the insurer, which must comply within 30 days of receiving it. It is not a dead end for the complainant: one who is not satisfied can still take the matter to a consumer commission or a court.

Rules at a glance

Key points

• The Insurance Ombudsman works under the Insurance Ombudsman Rules, 2017 and is completely free of cost.
• It is open to individuals, group-policy holders, sole proprietorships and micro enterprises, not to a large company on its commercial policy.
• A written representation to the insurer must come first.
• The complaint must be filed within one year of the insurer's rejection or unsatisfactory reply, or of the end of the month allowed for a reply.
• The Ombudsman first mediates and otherwise passes an award of up to ₹50 lakh, within 3 months of receiving all requirements.
• The award binds the insurer, which must comply within 30 days; the complainant can still go to a consumer commission or court.

Common misunderstandings

• The Ombudsman is not the first stop: a written representation to the insurer must come first.
• The award does not bind both sides equally: it binds the insurer, while a dissatisfied complainant can still go to a consumer commission or court.
• The Ombudsman cannot hear a matter that is already before a court, consumer commission or arbitrator.
• The cap is not ₹30 lakh any longer: it has been ₹50 lakh since 10 November 2023.

Questions people ask