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With insurance being the biggest source of consumer disputes, the government is pushing for an array of tweaks, including higher limits for the ombudsman, to ensure that the case count drops. Nearly 1. 7 lakh cases out of the total 5. 5 lakh pending cases before consumer commissions are related to the insurance sector.
Following a brainstorming by the department of consumer affairs, the finance ministry and insurance regulator Irdai have been asked to increase the ceiling for the ombudsman beyond Rs 30 lakh as a majority of the plans, especially in the life insurance segment, are higher than the limit.
One of the key gaps that has been noticed is the inability of the designated executives from the companies to decideon the matter as they often say that they are not empowered to decide beyond a limit, delaying a decision in the matter.
“The multilayer approach within an organisation needs to be reduced or eliminated by companies and disputes haveto be resolved in a timely manner. Companies should be held responsible for excessive delays,” an official told TOI.
Further, the department of consumer affairs has suggested that cases below Rs 2 lakh should be resolved without attorneys. Officials also said that mediation in pending cases as well as effective participation in Lok Adalats was another tool that should be deployed to reduce pendency.
Besides, insurers are seen to be wanting in their sales process as well as disclosing terms, which is sought to be rectified, although industry may not be amenable to the exercise. A mechanism to grade insurance companies has also been proposed although some private platforms are already doing it.
The government is of the view that high level of disputes reflects poorly on how companies as well as regulator deal with the consumer. There is a perception that regulators have ignored consumer interest, giving more attention to issues that are seen to be key for the development of the industry.
Following a brainstorming by the department of consumer affairs, the finance ministry and insurance regulator Irdai have been asked to increase the ceiling for the ombudsman beyond Rs 30 lakh as a majority of the plans, especially in the life insurance segment, are higher than the limit.
One of the key gaps that has been noticed is the inability of the designated executives from the companies to decideon the matter as they often say that they are not empowered to decide beyond a limit, delaying a decision in the matter.
“The multilayer approach within an organisation needs to be reduced or eliminated by companies and disputes haveto be resolved in a timely manner. Companies should be held responsible for excessive delays,” an official told TOI.
Further, the department of consumer affairs has suggested that cases below Rs 2 lakh should be resolved without attorneys. Officials also said that mediation in pending cases as well as effective participation in Lok Adalats was another tool that should be deployed to reduce pendency.
Besides, insurers are seen to be wanting in their sales process as well as disclosing terms, which is sought to be rectified, although industry may not be amenable to the exercise. A mechanism to grade insurance companies has also been proposed although some private platforms are already doing it.
The government is of the view that high level of disputes reflects poorly on how companies as well as regulator deal with the consumer. There is a perception that regulators have ignored consumer interest, giving more attention to issues that are seen to be key for the development of the industry.
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