Monday, April 8, 2019

Insurance Governing Bodies in India - IRDAI, IBAI and Insurance Ombudsman

Insurance Awareness Capsule for LIC AAO, NIACL AO and Assistant Exam. Today in this Article we will Discuss about Insurance Governing Bodes in India - IRDAI, IBAI and Insurance Ombudsman, their objective and Functions in Detail. 

Insurance Governing Bodies in India :-
I. IBAI
II. General Insurance Council
III. Insurance Ombudsman
IV. IRDA

Lets Discuss all these Insurance Governing Bodies in Detail :-

Insurance Brokers Association of India (I.B.A.I.)

History: Insurance Brokers Association of India (I.B.A.I.) was established as a Company under Section 25 of the Companies Act, 1956 on 25th July 2001. IBAI is run by a Board of Directors who are elected by the members. IBAI is a member of Bombay Chamber of Commerce and Industry, Mumbai as well as of Federation of Indian Chambers of Commerce and Industry. Only I.R.D.A. licensed insurance brokers are considered for membership of I.B.A.I.

Goal: The main aims of IBAI are to encourage communication among the Insurance/Re-insurance Broker members and to support, promote, and protect the interests of the members of IBAI.

I. It aims to provide an opportunity to the members for auxiliary education, training and research in all fields of insurance and re-insurance.

II. It takes care of the interests of Brokers with other organizations. Insurance Brokers Association of India (I.B.A.I.) is the only Insurance Regulatory and Development Authority (I.R.D.A.)-recognized body of licensed Insurance Brokers.

III. According to the Insurance Brokers’ Regulations 2002 outlined by the I.R.D.A., all licensed Brokers should be member of I.B.A.I. Direct Insurance Brokers, Composite Insurance Brokers and Re-Insurance Brokers are members of I. B. A. I.

General Insurance Council

The General Insurance (GI) Council is a part of the Insurance Association of India. It regulates the growth of the general insurance industry and maintains high quality customer service. The GI council has also strengthened its ties with several international insurance associations.

History:

In 1957, the General Insurance Council was established under the Indian Insurance Act 1938. It designed a code of conduct to ensure fair business practices. The Insurance Act was modified in 1968 to monitor the flow of major investments and reduce solvency margins. After the General Insurance Business Act was passed in 1972, the constitutional body underwent nationalization. About 107 insurance providers merged and divided into four companies, New India Assurance Company Ltd, National Insurance Company Ltd., United India Insurance Company Ltd, and Oriental Insurance Company Ltd. As a nationalized body, the GI Council actively started business on 1st January, 1973.

Role of General Insurance Council

The insurance domain is growing at the rate of 15-20% annually. As a matter of fact, it nearly contributes 7% to the GDP of India. The Insurance Regulatory and Development Authority have played a vital role in the insurance sector. Since four decades, the GI Council has rendered immaculate services to every individual in the country. The statutory body aims to:
  • Expand the general insurance sector
  • Facilitate economic development
  • Provide long-term funds for growth
  • Represent the general insurance industry as an authoritative collective voice
  • Resolve social issues such as insurance fraud and theft
Insurance Ombudsman

The institution of Insurance Ombudsman was created by a Government of India Notification dated 11th November, 1998 with the purpose of quick disposal of the grievances of the insured customers and to mitigate their problems involved in redresal of those grievances. This institution is of great importance and relevance for the protection of interests of policy holders and also in building their confidence in the system. The institution has helped to generate and sustain the faith and confidence among the consumers and insurers.

Appointment of Insurance Ombudsman

The governing body of insurance council issues orders of appointment of the insurance Ombudsman on the recommendations of the committee comprising of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a representative of the Central Government. Insurance council comprises of members of the Life Insurance council and general insurance council formed under Section 40 C of the Insurance Act, 1938. The governing body of insurance council consists of representatives of insurance companies.

Eligibility
Ombudsman are drawn from Insurance Industry, Civil Services and Judicial Services.

Terms of office
An insurance Ombudsman is appointed for a term of three years or till the incumbent attains the age of sixty-five years, whichever is earlier. Re-appointment is not permitted.

The Insurance Ombudsman are appointed by the Governing Body of Insurance Council (GBIC) and are empowered to entertain complaints on the following aspects in respect of personal line insurance:

a. Any Partial or total repudiation of claims by an insurer
b. Delay in settlement of claims
c. Any disputes in regards to premiums 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. Non-issue of Insurance document to Customers after receipt of premium.

Important Points related to Insurance Ombudsman
I. The complainant can approach the Office of Insurance Ombudsman as per jurisdiction, for value of the claim including expenses not exceeding Rs 20 lacs, within 1 year from the date of rejection/repudiation/partial settlement of claim by the Insurer.
II. The complaint shall be in writing duly signed by the policyholder or claimant/ legal heirs.
III. The forum of Insurance Ombudsman does not charge any fees for filing the complaint.
IV. The complainant should not have approached any other forum/court/arbitrator on the same subject matter of the claim.
V. The ombudsman shall pass an award within a period of three months from the receipt of the complaint. The awards are binding upon the insurance companies. 
VI. If the policy holder is not satisfied with the award of the Ombudsman, he can approach other venues like Consumer Forums and Courts of law for redressal of his grievances.
VII. There are Total -12 Insurance Ombudsmen Officer across India.

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