IRDAI admits not taking action against insurers for non-compliance on orders issued by ombudsman

The Insurance Regulatory and Development Authority of India (IRDAI) admitted in a RTI query that it hasn’t taken any action against any insurance company for non-compliance with awards or orders issued by the insurance ombudsman.

Moneylife reported based on a RTI query filed by Mumbai-based RTI activist Jeetendra Ghadge. In the reply to the RTI query over seeking details on action taken against insurance companies for non-compliance with orders of insurance ombudsman, the insurance regulator said, "No disciplinary action could be taken on any insurance company so far on grounds of non-compliance with the awards of insurance ombudsman."

The report adds that in 2019-20, around 1,864 awards are pending with both the private and public insurance companies for implementation and the passed awards or issued orders were in 9,528 cases. In 7,664 cases insurers complied with award or order but still 1864 cases are pending with insurers for compliance on the decisions taken by the insurance ombudsman.

The report based on the RTI query reveals that public sector insurance companies are at the forefront of non-compliance with the orders of ombudsman with Oriental Insurance company having a maximum of 480 awards pending with them, New India Assurance has 303 and National Insurance Company has 289 awards pending. Amongst private players, Bharti Axa Life Insurance has 198 awards pending.

The Executive Council of Insurers (ECI) which was formerly known as Governing Body of Insurance Council (GBIC) was established under the Insurance Ombudsman Rules, 2017 facilitates the insurance ombudsman. ECI’s annual report says there were 11,281 pending complaints in the beginning of FY19-20 and during the same year it had received 27,257 complaints taking the tally to 38,538 of which 29,816 were disposed and 8,722 were outstanding.

Between April 1, 2019 to March 31, 2020, the 17 offices of insurance ombusdmans had issued recommendation and awards in 15,329 cases amounting to Rs 13,575.61 lakh. Maximum complaints were under life insurance over mis-selling by private insurers.