REDRESSAL OF PUBLIC GRIEVANCES RULES, 1998
These rules may be called the Redressal of Public Grievances Rules, 1998.
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1. Vide G.S.R. 670(E), dated 11th November, 1998, published in the Gazette of India, Extra., Pt. II, Sec. 3 (i), dated 11th November, 1998.
These rules shall apply to all the insurance companies operating in general insurance business and in life insurance business:
Provided that the Central Government may exempt an insurance company from the provisions of these rules, if it is satisfied that an insurance company has already a grievance redressal machinery which fulfils the requirements of these rules.
The objects of these rules are to resolve all complaints relating to settlement of claim on the part of insurance companies in cost-effective, efficient and impartial manner.
In these rules unless the context otherwise requires,—
(b) “Committee” means an Advisory Committee referred to in rule 19;
(c) “financial year” means a period of twelve months commencing from the Ist day of April of any year and ending on 31st day of March of the succeeding year;
(d) “General Insurance Corporation of India” means a government company formed under sub-section (1) of section 9 of the General Insurance Business (Nationalisation) Act, 1972 and shall include a subsidiary company of such company;
(e) “governing body” means governing body of the Insurance Council constituted under sub-rule (1) of rule 5;
1[(f) Insurance Council will consist of Life Insurance Corporation of India, Gener
(1) There shall be a governing body of the Insurance Council which shall consist of one representative from each of the insurance companies.
(2) The representatives of an insurance company shall ordinarily be Chairman or Managing Director or any one of the Directors of such company.
(3) The governing body shall formulate its own procedure for conducting its business including the election of the Chairman:
Provided that the Chairman of the Life Insurance Corporation of India shall act as the first Chairman of the governing body.
(1) The governing body shall appoint one or more persons as Ombudsman for the purpose of these rules.
(2) The Ombudsman selected may be drawn from a wider circle including those who have experience or have been exposed to the industry, civil service, administrative service, etc., in addition to those drawn from judicial service.
(3) An Ombudsman shall be appointed by the governing body from a panel prepared by the committee consisting of—
(a) Chairman of Insurance Regulatory Authority —Chairman
(b) Two representatives of Insurance Council including
one each from the Life Insurance Business and
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An Ombudsman shall be appointed for a term of three years and shall be eligible for reappointment:
Provided that no person shall hold office as such Ombudsman after he has attained the age of 65 years.
(1) An Ombudsman may be removed from service for gross misconduct committed by him during his term of office.
(2) The governing body may appoint such person as it thinks fit to conduct enquiry in relation to misconduct of the Ombudsman.
(3) All enquiries on misconduct will be sent to Insurance Regulatory Authority which may take a decision as to the proposed action to be taken against the Ombudsman.
(4) On recommendations of the Insurance Regulatory Authority if the governing body is of opinion that the Ombudsman is guilty of misconduct, it may terminate his services.
(1) There shall be paid to the Ombudsman a salary which is equal to the salary of the Judge of a High Court.
(2) The other allowances and perquisites of the Ombudsman shall be such as may be specified by the Central Government.
(1) The office of the Ombudsman shall be located at such place as may be specified by the Insurance Council from time to time.
(2) The governing body shall specify the territorial jurisdiction of each Ombudsman.
(3) The Ombudsman may hold sitting at various places within his area of jurisdiction in order to expedite disposal of complaints.
(1) The Ombudsman shall have such secretarial staff as may be provided to him by the Insurance Council after having consultation with the Ombudsman.
(2) The Ombudsman may engage the services of professional expert with a view to assist him in discharging his functions.
(3) The salary, allowances and perquisites payable to Ombudsman, the salary, allowances and other benefits payable to the staff of the secretariat and all expenses incurred for the purposes of these rules shall be borne by the Insurance Council.
(4) The Ombudsman shall prepare the budget indicating the requirement of funds before the beginning of every financial year.
(5) The budget of the office of Ombudsman will be sent to the governing body.
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(1) The Ombudsman may receive and consider—
(b) any partial or total repudiation of claims by an insurer;
(c) any dispute in regard to premium paid or payable in terms of the policy;
(d) any dispute on the legal construction of the policies insofar as such disputes relate to claims;
(e) delay in settlement of claims;
(f) non-issue of any insurance document to customers after receipt of premium.
(2) The Ombudsman shall act as counsellor and mediator in matters which are within his terms of reference and, if requested to do so in writing by mutual agreement by the insured person and insurance company.
(3) The
(1) Any person who has a grievance against an insurer, may himself or through his legal heirs make a complaint in writing to the Ombudsman within whose jurisdiction the branch or office of the insurer complained against is located.
(2) The complaint shall be in writing duly signed by the complainant or through his legal heirs and shall state clearly the name and address of the complainant, the name of the branch or office of the insurer against which the complaint is made, the fact giving rise to complaint supported by documents, if any, relied on by the complainant, the nature and extent of the loss caused to the complainant and the relief sought from the Ombudsman.
(3) No complaint to the Ombudsman shall lie unless—
(a) The complainants had before making a complaint to the Ombudsman made a
(1) When a complaint is settled, through mediation of the Ombudsman, undertaken by him in pursuance of request made in writing by complainant and insurer through mutual agreement, the Ombudsman shall make a recommendation which he thinks fair in the circumstances of the case. The copies of the recommendation shall be sent to the complainant and the insurance company concerned. Such recommendation shall be made not later than one month from the date of the receipt of the complaint.
(2) If a complainant accepts the recommendation of the Ombudsman, he will send a communication in writing within 15 days of the date of receipt of the recommendation. He will confirm his acceptance to Ombudsman and state clearly that the settlement reached is acceptable to him, in totality, in terms of recommendations made by the Ombudsman in full and final settlement of complaint.
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(1) Where the complaint is not settled by agreement under rule 15, the Ombudsman shall pass an award which he thinks fair in the facts and circumstances of a claim.
(2) An award shall be in writing and shall state the amount awarded to the complainant:
Provided that Ombudsman shall not award any compensation in excess of which is necessary to cover the loss suffered by the complainant as a direct consequence of the insured peril, or for an amount not exceeding rupees twenty lakhs (including ex gratia and other expenses), whichever is lower.
(3) The Ombudsman shall pass an award within a period of three months from the receipt of the complaint.
(4) A copy of the award shall be sent to the complainant and the insurer named in the complaint.
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If the complainant does not intimate the acceptance under sub-rule (5) of rule 16, the award may not be implemented by the insurance company.
If the Ombudsman deems fit, he may award an ex gratia payment.
An Advisory Committee of not exceeding five eminent persons shall be notified by the Government to assist the Insurance Regulatory Authority to review the performance of the Ombudsman from time to time. The Insurance Regulatory Authority shall decide the time, venue and quorum of such meeting. The authority after discussing the matter with the governing body, may recommend to Government appropriate proposals for effecting improvements in the functioning of Ombudsman. In the light of recommendations made by the Insurance Regulatory Authority, the Government may carry out such amendments to these rules as it may deem fit.
The Ombudsman shall furnish a report every year containing a general review of the activities of the office of the Ombudsman during preceding financial year to the Central Government and such other information as may be considered necessary by it. In the Annual Report, the Ombudsman will make an annual review of the quality of services rendered by the insurer and make recommendations to improve these services.
The Insurance Council may suggest to the Ombudsman such recommendations as it deems fit and which in its opinion will enhance the utility of the Annual Report and also so that the objectives of the rules are clearly analysed in terms of the activities in the year under review. Suggestion for long-term improvement of insurance sector will be incorporated by the Ombudsman in his report.
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