IRDA has circulated a depressing note on the escalating numbers of unsettled protests from policyholders, noting that insurance companies do not resolve complaints in the prearranged manner. Subsequently, policyholders have escalated their complaints (non-life and life insurance) to regulatory authorities of ombudsmen and IRDA.
The circular signed by IRDA stated, “It is observed that Insurance companies have failed to indicate consideration, compassion, and enthusiasm towards resolving the complaints received from policyholders’ and other constitutional agencies.”
The grievances from policyholders’ are listed via an automated, central repository of
Integrated Grievance Management System (IGMS), established in 2011. This platform allows transparency in dealing with grievances, because it leverages the policyholder to communicate directly with IRDA if their insurance company fails to resolve the issue in a timely manner. The system permits a policyholder to lodge a complaint against an insurance company, insurance broker, or a mediator, and receives updates on the status of complaint made.
As per the data, complaints for life insurance policies are staggering. The lodged complaints jumped to 3,74,620 in FY14 as compared to 3,41,012 in FY13. For private life insurance companies the numbers escalated to 2,89,336 in FY14 from 2,67,978 reported in the previous year. Meanwhile, for government-owned LIC the statistics indicate an increase to 85,284 from 73,034 in FY 13-14.
IRDAI has strictly asked insurance companies to resolve the grievances in the stipulated period, else insures may lose their license. The governing authority has further emphasized that frontline staff, customer service staff and higher officials should be made aware of the situation.
To lodge complaints on IGMS, a policyholder must first register on the website and obtain unique identification code. After filing the complaint, the policyholder will receive a reference number for tracking the status of the grievance. The system manages the history of the complaint made by the individual, and if the policyholder is dissatisfied with the solution offered by the insurance company, they can directly approach IRDA for suitable resolution.
The grievances typically relate to wrong product information shared by the insurance company at the pint of sales. Thus, wrong selling of insurance products leads to policy lapse and no benefits to the policyholder.
According to industry experts, selling ULIPs for short-term goals, or rendering wrong information on guaranteed products make the top heap of complaints redressal. While surveyors not reaching on time to assess damages in non-life claims, or policyholder unable to receive the claim settlement money is among the other areas of lodging complaints.
Upon receiving grievance, insurance company must send a written acknowledgement receipt within 3 working days and resolve the complaint in 15 days thereafter.
Source: This news was published on May1, 2015 in financialexpress.com under the title: Insurance: Irdai wants quicker action as complaints remain unresolved