[1][THE REDRESSAL OF
PUBLIC GRIEVANCES RULES, 1998 In exercise of the powers conferred by sub-section
(1) of Section 114 of the Insurance Act, 1938 (4 of 1938) the Central
Government hereby frames the following Rules, namely:- These
Rules may be called the Redressal of Public Grievances Rules, 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 fulfills 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:- (a)
"Act" means Insurance Act, 1938; (b)
"committee" means an advisory committee
referred to in Rule 19; (c)
"financial" year" means period of twelve
months commencing from the 1st day of April of any year and ending on 3 lst 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; (f)
"Insurance Council" means the Life insurance
Council and the General Insurance Council referred to in section 64C of the
Act; (g)
"Insurance Regulatory Authority" means a body
established by Government of India vide Resolution No. 17(2)/94 Ins. V dated
23-01-1996 to monitor the orderly growth of insurance industry; (h)
"Insurance Company" means the Life Insurance
Corporation of India, the General Insurance Corporation of India and any
other company which has been given a licence to carry on business of life
insurance or of the general insurance, as the case may be; (i)
"insured person" means and individual by whom
or on whose behalf an insurance policy has been taken on personal lines; (j)
"Life Insurance Corporal ion of India" means is
the Life Insurance Corporation of India established under the Life Insurance
Corporation Act, 1956; (k)
"Personal lines" means an insurance policy
taken or given in an individual capacity; (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 from Genera Insurance Business respectively. - Member (c) One
representative of the Central Government - Member An
Ombudsman shall be appointed for a term of three years and shall be eligible
for re-appointment 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 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 maybe 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 eveiy financial year. (5)
The budget of the office of Ombudsman will be sent to the
Governing Body. (6)
The Governing Body will finalise the budget in
consultation with the Ombudsman and shall allocate the funds to the office of
Ombudsman. (7)
The total expenses on Ombudsman and his staff shall be
incurred by the insurance companies who are members of the insurance council in
such proportion as may be decided by the Governing Body from time to time: Provided
that till a decision is taken by the Governing Body, the entire expenditure
shall be shared equally between the insurance companies in the life insurance
business and general insurance business in equal proportion. (8)
The share of expenditure which is to be incurred by each
insurance company shall be in the ratio of premium income for the previous year
of such company. Explanation:-
For the purpose of this sub-rule "premium income" means the gross
direct premium income of the insurer without taking into account from time to
time income on reinsurance accepted by the insurance company. (1)
The Ombudsman may receive and consider:- (a)
Complaints under rule 13; (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 in
so far 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 Ombudsman's decision whether the complaint is fit and
proper for being considered by it or not shall be final. (1)
Any person who has a grievance against an insurer, man
himself or through his legal heirs make a complaint in writing to the ombudsman
within whose jurisdiction the branch or office of the insurer complaint against
is located. (2)
The complaint shall be in writing duly signed by the
complainant or though his legal heirs and shall state clearly the name and
address of the complainant, the name of the branch of 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 written representation to the insurer named in the complaint
and either insurer had rejected the complaint or the complainant had not
received any reply within a period of one month after the insurer concerned
received his representation or the complainant is not satisfied with the reply
given to him by the insurer; (b)
the complaint is made not later than one year after the
insurer had rejected the representation or sent his final reply on the
representation of the complainant; and (c)
the complaint is not on the same subject matter, for
which any proceedings before any court, or Consumer Forum, or arbitrator is
pending or were so earlier. (1)
The Ombudsman may, if he deems fit, adopt a procedure other
than mentioned in sub-rule (1) and (2) of Rule 13 for dealing with a claim: Provided
that the Ombudsman may ask the parties for necessary papers in support of their
respective claims and where the considers necessary, he may collect factual
information available with the insurance company. (2)
The Ombudsman shall dispose of a complaint fairly and
equitably. (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 sent 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 totally,
in terms of recommendations made by the Ombudsman in full and final settlement
of complaint. (3)
The Ombudsman shall sent to the insurance company a copy
of the recommendation, along with the acceptance letter received from the
complainant. The insurer shall thereupon comply with the terms of the
recommendations immediately not later than 15 days of the receipt of such
recommendation and the insurer shall inform the Ombudsman of its compliance. (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. (5)
The Complainant shall furnish to the insurer within a
period of one month from the date of receipt of the award, a letter of
acceptance that the award is in full and final settlement of his claim. (6)
The insurer shall comply with the award within 15 days of
the receipt of the acceptance letter under sub-rule (5) and it shall intimate the
compliance to the Ombudsman. 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 Miscellaneous Provisions: An
Advisory Committee consisting 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 they 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 enhence 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. [1]
Pub. in Gazette of India, Part II S. 3(i) Ex. No. 439 dated 11-11-1998 at Page.
4. Issued by Notification GSR 670 (E) dated 11-11-1998.THE REDRESSAL OF PUBLIC GRIEVANCES
RULES, 1998
PREAMBLE