IRDAI to Mandate Internal Insurance Ombudsman in All Insurers to Strengthen Grievance Redressal Mechanism

The Insurance Regulatory and Development Authority of India (IRDAI) is set to introduce a new framework requiring all insurance companies (excluding reinsurers) with over three years of operations to appoint an Internal Insurance Ombudsman. The move is aimed at enhancing policyholder protection, building trust, and ensuring a faster, transparent, and fair resolution of customer grievances.

Applicability & Objective

• Applicable to all insurers except reinsurers with >3 years of operations.
• Seeks to establish a structured, internal grievance redressal system at the company level.
• Intended to complement external redressal bodies like the Insurance Ombudsman and the IRDAI Grievance Management System (IGMS).

Functions & Jurisdiction

• The Internal Insurance Ombudsman will:
  • Handle unresolved or escalated complaints.
  • Cover complaints up to ₹50 lakh in claim value.
• More than one ombudsman can be appointed with clearly defined jurisdiction to improve coverage and turnaround time.

Reporting Structure

• Functional Reporting: To the Board or the Policyholder Protection, Grievance Redressal & Claims Monitoring Committee (PPGR & CM).
• Administrative Reporting: To the MD/CEO of the insurance company.

Eligibility Criteria

• Experience: Minimum 20 years in the insurance sector.
• Must have held a position at least two levels below Board Director.
• Should not be currently or previously associated with the insurer or its group entities.
• Minimum entry age: 55 years.
• Term: 3 years fixed or until the age of 70, whichever is earlier.

When Can the Ombudsman Intervene?

• If a complaint has not been responded to within 30 days.
• If the customer has filed an appeal against a rejected or partially resolved complaint.

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