New IRDA method a boon for insurers
The IRDA Regulation of 2002 on the Protection of Policy Holders’ Interest mandates that every insurer put in place an effective mechanism to speedily redress consumer complaints and also inform every policy holder of it. Pushpa Girimaji tells us more...business Updated: Mar 15, 2009 22:48 IST
The Insurance Regulatory and Development Authority (IRDA) Regulation of 2002 on the Protection of Policy Holders’ Interest mandates that every insurer put in place an effective mechanism to speedily redress consumer complaints and also inform every policy holder of it. In fact this information, as well as details of the Ombudsman scheme are to be given along with every policy document. Now, how much effort does this require on the part of the insurers?
Yet last month, the regulator had to express his displeasure over the way this mandate was being ignored. The regulator prescribed a specific format for insurers to follow, so that consumers got the right information.
But that’s not the only step that the IRDA is taking to strengthen the consumers’ right to information and complaint redressal. The regulator plans to introduce on its Internet site a user-friendly and transparent grievance redressal system for policy-holders. A special software for grievance redressal provides for immediate transfer of the complaints registered with the IRDA to the insurers concerned and also enables online tracking of the progress of the complaint by both the complainant and the regulator.. With the regulator watching the progress of every complaint, the insurer would not only be forced to act quickly, but fairly. Besides, the detailed data generated by the software , such as classification of complaints and insurer-wise data, can help the regulator assess the quality of service and make interventions where necessary.
This can put a stop to unfair market practices and also address systemic deficiencies.
Look at some basic statistics on the vast number of complaints that consumers file against insurers. During the year 2006-2007, the number of complaints received by the in-house grievance redressal system of life insurance companies was 68,359, while that of non-life companies was 87,207. This number jumped to 2,03,246 (life) and 1,827,38 (non-life) during the year 2007-2008.
With numbers like that, online monitoring of complaints can make a world of difference.