Insurance Ombudsman Offices Can Admit Policyholder Complaints of Up To Rs 50 Lakh

A policyholder can now register complaints that are related to compensation claims of up to Rs 50 lakh with insurance ombudsman offices in India. 

Earlier, the maximum compensation that ombudsman offices could award to policyholders had a capping at Rs 30 lakh. On November 10, 2023,  the finance ministry introduced an amendment to the insurance ombudsman rules.

There had been a call to enhance this particular limit from Industry watchers and insurance ombudsman officials. This is due to many policyholders are currently buying term insurance, health insurance, critical insurance and personal accident policies with sums assured of more than Rs 1 crore.

The most preferred cover amount for high net-worth policyholders was Rs 1.75 crore in FY 23, as per a study. 

Backed by rising disposable incomes, along with a surge in awareness related to the importance of pure protection term cover to secure the financial future of dependents and affordable premiums, several individuals have been motivated to opt for high-value term insurance policies.

Earlier, individuals who were not able to approach insurance ombudsman offices had to reach out to consumer courts with their complaints. It is important for policyholders to know that in the case of claim rejections, push-back can ensure that the claims are settled as per their satisfaction.

In case an individual is not satisfied with the decisions of an insurance company (insurer) related to the rejection of a grievance or failure to respond, the Insurance Regulatory and Development Authority of India (IRDAI) and insurance ombudsman offices can be reached out with a complaint.

It is also possible to file a complaint online at This should be done within 12 months of an insurer rejecting the complaint.

Prior to reaching out to insurance ombudsman offices, write to the insurer and wait for at least 30 days. In case the insurance company fails to respond, reach out to ombudsman offices. The regulator-mandated adjudicating authorities have been directed to dispose of the case within 90 days of having received it.

It is only after examining arguments on both sides, the insurance ombudsman officer will pass an order. In case an individual is not satisfied with the verdict, the next step is to reach out to consumer courts. However, the order will be binding on insurers.

Insurers are mandated to implement the order given by an ombudsman within 30 days. If they fail to do so, policyholders need to alert the ombudsman offices all over again. In such cases, insurers have to shell out penal interest, which is two percentage points over the prevailing bank rate, as per the Protection of Policyholders Regulations, 2017.

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