IC38 Chapter 3 Notes



Grievance redressal mechanism – IRDA has various regulations in order to render the consumers grievances/complaints which come under protection of policy holder”s interests‟ regulation 2002.

  1. i) Integrated grievance management system (IGMS) – IRDA has launched an integrated grievance management system (IGMS) which acts as a central repository of insurance grievance data and as a tool for monitoring grievances in the industry. Policy holders can register on this system with their policy details. Complaints are then forwarded to the respective insurance company.
  2. ii) The consumer protection act 1986 – the act was passed “to provide for better protection of the interest of consumers and to make provision for the establishment of consumer‟s disputes”.

Service – any provision made available to potential users such as banking, financing, transport, insurance etc.

Consumer – any person who buys any goods for a consideration or hires or avails of any services for a consideration.

Defect – it means any fault, imperfection, and shortcoming, inadequacy in quality, nature, manner or performance for any service that is taken by the customer.

Complaint – it means any allegation given in writing regarding any unfair trade, defect in goods, deficiency in services hired or availed, excess pricing.

Consumer dispute – it means a dispute where the person against whom the complaint is made, denies and disputes the allegations made on him.

Ombudsman :

  • Total office of ombudsman in India – 12.
  • The Ombudsman power is restricted to the value not exceeding Rs.20 Lacs
  • Recommendations should be made within 1 month of the receipt of a complaint
  • The complainant has to accept the recommendation in writing within 15 days of receipt of such recommendation.
  • The insurance companies are required to honor the AWARDS passed by Ombudsman within 15 days.
  • If the dispute is not settled, the Ombudsman will pass an award to the insured within 3 months/90 days from the date of receipt of the complaint.
  • The insured should acknowledge within 1 month of receipt of such award.


Complaints can be made to the ombudsman if :

The complainant had made a previous written representation to the insurance company and the insurance company had :

  • Rejected the complaint.
  • The complainant had not received any reply within one month from insurer.
  • The complainant is not satisfied with the reply given by the insurer.
  • The complaint is made within one year from the date of rejection by the insurance company.
  • The complaint is not pending in any court or consumer forum.

Judicial Channels :


  • Established by central
  • Government by notification.
  • Complaints of Claim value exceeding Rs. 1 Crore and
  • appeals against the order of any state commission.

State commission

  • Established by state govt. by notification.
  • Complaints of Claim value exceeding Rs.20 Lakhs but does not exceed Rs.100 lakhs and
  • appeals against the order of any district forum within the state.

District forum

  • Established by state govt. in each district.
  • Complaints of Claim value up to Rs. 20 lakhs

Important Days :

  • 10 days – Insurer has to communicate the policy holder on any inquery.
  • 15 days – Customer can cancel the contract within 15 days of receiving the policy (Free look period/Cooling off period).
  • 15 days – Insurer has to convey the policy holder about acceptance or rejection of proposal.
  • 15 days – In case of claim insurer can ask for additional documents within 15 days of receiving the claim documents.
  • 15 days – Insurer has to honor the Award passed by the ombudsman within 15 days.
  • 15 days – Grace period in case of monthly mode of premium payment.
  • 31 days or one month – Grace period in case of Quarterly/half yearly/annual mode.
  • 30 days – ombudsman has to pass recommendation.
  • 30 days – Insurer has to settle the claim within 30 days after receiving the claim document.
  • 90 days – Ombudsman has to pass an award within 90 days.
  • 180 days – maximum time in case of disputed claims.