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THE Insurance Regulatory and Development Authority (IRDA) has decided to tighten its supervisory control over the way companies handle complaints. At a workshop organised recently to discuss ‘consumer grievance management’ in the insurance industry, the IRDA unveiled a new software that it plans to introduce for the purpose. The software not only provides for immediate transfer of the complaints registered with the authority to the insurers concerned, but also ensures online tracking of the progress of the complaint by both the complainant and the regulator. This would not only render the entire process of grievance redress transparent, but also ensure better scrutiny by the regulator. In addition, the data generated by the software will help the regulator assess the quality of service provided by the insurers and also identify grievance-prone areas that require the intervention of the regulator. The IRDA regulation on the protection of policy holders’ interest mandates that every insurer puts in place an effective mechanism for speedy redress of complaints. If clients are not satisfied with the redress offered by the in-house system of the insurer, then they have an option to lodge a complaint with the insurance Ombudsman. The IRDA, too, receives a number of complaints from customers, which are forwarded to the insurers, but there is no system in place to automatically track the progress of these complaints or know the ultimate result, except to send reminders to insurers and wait for a response from them. Similarly, the regulator is dependent to a large extent on the inputs or statistics sent by the insurer to assess the quality of grievance redress offered by the insurers. It is for this reason that the authority has come up with a software that will facilitate better regulation of complaint redress. In due course, it plans to bring into this network, the resolution of complaints by the Ombudsmen, too, so that there is complete integration of the entire grievance redress mechanism of the industry. Speaking at the workshop, the IRDA chairman, J. Hari Narayan, made it clear that policy holders’ protection was the first priority of the authority and every effort would be made to ensure this. Focusing on the clients’ right to information, education and complaint redress, Narayan reminded the insurance industry that attending to complaints was not just an ethical or professional duty, but also part of the contract paid for by the customer or the policy holder. The grievance cell of the insurance regulator (complaints to the regulator can be sent online or by post or even over telephone) received, during 2007-2008, 4286 complaints, as against 2479 the previous year. Broadly, categorising the complaints, Hari Narayan said they related to (a) marketing practices of insurers; (b) structure and terminology of the policy instruments; and (c) claim settlement. While the third category of complaints were mostly quasi-judicial in nature and were to a large extent handled by the Ombudsmen, the first category, pertaining to market practices, was entirely within the control of the insurer, and the regulator would exhibit zero tolerance for unfair marketing practices. The IRDA regulation on the protection of policy holders’ interest also mandates that the insurance companies provide to every policy holder, along with the policy document, details of the in-house complaint redress mechanism, and also that of the insurance Ombudsman. Last month, in a circular sent to all life insurers, the regulator expressed unhappiness over the way this mandate was being followed (or not followed). Saying that the required information was not being properly communicated to the policy holders, the regulator prescribed a specific format for insurers to follow, so that clients got the right information. Accordingly, every insurer now has to provide, along with the policy document, details of the address, phone number and e-mail ID of the grievance cell or the office of the insurer where the complaint can be sent.
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