The Ministry of Finance (Department of Financial Services) has notified the Draft rules to amend the Insurance Ombudsman Rules, 2017 (“ Draft Rules ”) bearing Ref. No. G.S.R. 864(E), dated November 25, 2025. The Draft Rules will be published on the Gazette of India after expiry of 45 days from the date of publication of the Draft Rules. Any objections or suggestions from the stakeholders likely to be affected by the proposed changes may be addressed to the Secretary, Ministry of Finance, Department of Financial Services, Jeevan Deep Building, 3rd floor, Sansad Marg, New Delhi-110 001, within the stipulated time.
A summary of the key highlights of the Draft Rules is presented in the table below:
Summary of Changes
Draft Insurance Ombudsman (Amendment) Rules, 2025
| Sr. No. | Clause No. | Existing Clause | Revisions | Revised Clause |
|---|---|---|---|---|
| 1 | Short Title | These rules shall be called the Insurance Ombudsman Rules, 2017. (herein called as “Rules”) | Substituted with the Insurance Ombudsman (Amendment) Rules, 2025. | The Rules may be called the Insurance Ombudsman (Amendment) Rules, 2025. (herein called as “Draft Rules”) |
| 2 | Rule 2 | The objects of these Rules is to resolve all complaints of all personal lines of insurance, group insurance policies, policies issued to sole proprietorship and micro enterprises on the part of insurance companies and their agents and intermediaries in a cost effective and impartial manner. | Inserted the words “made under rules 13 and 14 of these Rules for policies” after the word “complaints” | The objects of these Rules is to resolve all complaints made under Rules 13 and 14 of these Rules for policies of all personal lines of insurance, group insurance policies, policies issued to sole proprietorship and micro enterprises on the part of insurance companies and their agents and intermediaries in a cost effective and impartial manner. |
| 3 | Rule 3 | These rules shall apply to all insurers and their agents and intermediaries in respect of complaints of all personal lines of insurance, group insurance policies, policies issued to sole proprietorship and micro enterprises. | Substituted the words “agents and intermediaries” for “agents, intermediaries and insurance brokers” | These rules shall apply to all insurers and their agents, intermediaries and insurance brokers in respect of complaints of all personal lines of insurance, group insurance policies, policies issued to sole proprietorship and micro enterprises. |
| 4 | Rule 4, sub-rule (1) | No existing provision | Inserted the definitions of Appellate Authority and Authority under clauses (aa) and (aaa) after clause (a) in the Draft Rules. | (aa) “Appellate Authority (AA)” shall mean an Appellate Authority constituted by Insurance Regulatory and Development Authority of India under rule 17A. |
| 5 | Rule 4, sub-rule (1), clause (e) | “Insurance Ombudsman” means the Insurance Ombudsman established under rule 7; | Substituted the words “a person appointed as an Insurance Ombudsman under rule 7 of these rules” for the words “the Insurance Ombudsman appointed under rule 7” | “Insurance Ombudsman” means a person appointed as an Insurance Ombudsman under rule 7 of these rules |
| 6 | Rule 4, sub-rule (1), clause (g) | “Ombudsman” means a person appointed as an Insurance Ombudsman under these rules; | Omitted clause (g) | “Ombudsman” means a person appointed as an Insurance Ombudsman under these rules; |
| 7 | Rule 4, sub-rule (1), clause (i) | “Group insurance” means insurance cover obtained by a group of individuals, either through an employer or otherwise, under a single contract; | Insertion of the words “, including Government Schemes being implemented through insurance companies” after the word “single contract” | “Group insurance” means insurance cover obtained by a group of individuals, either through an employer or otherwise, under a single contract, including Government Schemes being implemented through insurance companies; |
| 8 | Rule 4, sub-rule (2) | All other words and expressions used in these rules but not defined shall have the meanings respectively assigned to them in the Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999. | Substituted the words “Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999” by the words “Insurance Act, 1938, the Insurance Regulatory and Development Authority Act, 1999 and the Rules or Regulations made thereunder.” | All other words and expressions used in these rules but not defined shall have the meanings respectively assigned to them in the Insurance Act, 1938, the Insurance Regulatory and Development Authority Act, 1999 and the Rules or Regulations made thereunder. |
| 9 | Rule 5 | (1) There shall be a Council for Insurance Ombudsmen consisting of nine members including the Chairperson. (2) The members of the Council for Insurance Ombudsmen shall comprise of— (i) two persons representing life insurers to be nominated by the Life Insurance Council ; (ii) two persons representing General insurers, other than stand-alone health insurers, to be nominated by the General Insurance Council; (iii) one person representing stand-alone health insurers to be nominated by the General Insurance Council; | (iv) one representative of the Authority; and (v) one representative of the Central Government in the Ministry of Finance from the Department of Financial Services not below the rank of Joint Secretary or equivalent ; (vi) the Chairman, Life Insurance Corporation of India (LIC of India) established under the Life Insurance Corporation Act, 1956 (31 of 1956) or the Chairman, General Insurers’ (Public Sector) Association of India (GIPSA) provided they are not acting as Chairperson of the Council for Insurance Ombudsmen | … |
| 10 | Rule 6 | (2) In case any vacancy arises in any Insurance Ombudsman due to resignation or retirement or death of the Ombudsman, the Council for Insurance Ombudsmen shall direct an Ombudsman of such other territorial jurisdiction to hold additional charge of the Insurance Ombudsman where such vacancy may arise. | (3) The Council for Insurance Ombudsmen may constitute such committees and as and when deemed necessary obtain the assistance of outside expertise for preparing the guidelines referred to in sub-rule (1). | Sub-rule (2) shall be substituted |
| 11 | Rule 7 | The Council for Insurance Ombudsmen shall appoint such number of Insurance Ombudsman for such territorial jurisdiction as the Council for Insurance Ombudsmen may specify, for discharging the duties and functions under these rules. | The Council for Insurance Ombudsmen shall appoint such number of Insurance Ombudsman for such territorial jurisdiction as the Council for Insurance Ombudsmen may specify, for discharging the duties and functions under these rules. | … |
| 12 | Rule 7A | 7A. Qualification for appointment of Insurance Ombudsman.— | A person shall not be qualified for appointment as Insurance Ombudsman, unless he— | (i) is not less than fifty-five years but not exceeding sixty-five years of age as on the last date specified for receipt of application in the advertisement; |
| 13 | Rule 7B | (1) The Council for Insurance Ombudsmen shall shortlist up to five candidates from each category of applicants specified in clauses (ii) and (iii) of rule 7A, for each vacancy from amongst eligible applicants, reckoned on the basis of the length of service of the applicants in their respective category: | Provided that where the number of candidates to be shortlisted exceeds the number specified under this rule, on account of two or more candidates having the same length of service, all candidates with such length shall be included in the shortlist. | Explanation.—For the purposes of this rule, the length of service, in respect of an applicant— |
| 14 | Rule 8 | An Insurance Ombudsman shall hold office for a term of three years or till he attains the age of sixty-eight years, whichever is earlier, and shall not be eligible for reappointment: | Provided that every Insurance Ombudsman holding office as such as on the 2nd day of March, 2021, may continue to hold office for the term specified at the time of his appointment or till he attains the age of seventy years, whichever is earlier. | Provided further that the Insurance Ombudsman may resign by giving prior notice in writing of not less than ninety days in lieu of three months‟ salary, to the Council for Insurance Ombudsmen, informing his intention to resign; in case the last date of notice period falls on Saturday or Sunday or holiday, the Insurance Ombudsman shall be relieved on the next working day. |
| 15 | Rule 11 | (1) The office of the Insurance Ombudsman shall be located at such places and shall have such territorial jurisdiction as may be specified by the Council for Insurance Ombudsmen from time to time. | (2) The Council for Insurance Ombudsmen shall specify the territorial jurisdiction of each Ombudsman. | … |
| 16 | Rule 12 | Offices of Council for Insurance Ombudsmen and Insurance Ombudsman. — | (1) The Authority shall make available to the Insurance Ombudsman such secretarial staff as may be determined by the Council for Insurance Ombudsmen. | (2) The salary, allowances and perquisites payable to the staff of the Insurance Ombudsman secretariat and all expenses incurred in connection with administration, including expenses to be incurred by the Council for Insurance Ombudsmen , fees of professional experts engaged under sub-rule (3) of rule 15 and expenses towards Advisory committee constituted under rule 19 shall be borne by the Life Insurance Council and the General insurance Council in such proportion as the Council for Insurance Ombudsmen may, by a general or special order specify, from time to time, in this behalf. |
| 17 | Rule 13 | (1) The Ombudsman shall receive and consider complaints or alleging deficiency in performance of an insurer (including its agents and intermediaries) or an insurance broker, on any of the following grounds— | (b) any partial or total repudiation of claims by the life insurer, General insurer or the health insurer; | … |
| 18 | Rule 14 | … | (iii) after expiry of a period of one month from the date of sending the written representation to the insurer or the insurance broker, as the case may be, if the insurer or the insurance broker, as the case may be, named fails to furnish reply to the complainant | (6) The Council for Insurance Ombudsmen shall develop a complaints management system, which shall include an online platform developed for the purpose of online submission and tracking of the status of complaints made under rule 14. |
| 19 | Rule 15 | (1) The Ombudsman may, if he deems fit, allow the complainant to adopt a procedure other than under sub-rule(1) or sub-rule (2) of rule 14 for making a complaint, after notifying the parties to the dispute. | … | The Ombudsman may, on his own or on the request of the complainant, hear a matter through video-conference if he is satisfied that circumstances so require, after notifying the complainant and the insurer or insurance broker concerned, subject to guidelines issued by the Council for Insurance Ombudsmen in this regard and published on its website: Provided that the Ombudsman may allow the insurer (including its agents andIntermediaries) or insurance broker, as the case may be, to be heard through video conference. |
| 20 | Rule 16 | (1) Where a complaint is settled through mediation, the Ombudsman shall make a recommendation which it thinks fair in the circumstances of the case, within one month of the date of receipt of mutual written consent for such mediation and the copies of the recommendation shall be sent to the complainant and the insurer or the insurance broker, as the case may be, concerned. | (2) If the recommendation of the Ombudsman is acceptable to the complainant, he shall send a communication in writing within fifteen days of receipt of the recommendation, stating clearly that he accepts the settlement as full and final. | (3) The Ombudsman shall send to the insurer or the insurance broker, as the case may be, a copy of its recommendation, along with the acceptance letter received from the complainant and the insurer or the insurance broker, as the case may be, shall, thereupon, comply with the terms of the recommendation immediately but not later than fifteen days of the receipt of such recommendation, and inform the Ombudsman of its compliance. |
| 21 | Rule 17 | … | (3) Where the award is in favour of the complainant, it shall state the amount of compensation granted to the complainant after deducting the amount already paid, if any, from the award: | Provided that the Ombudsman shall,—(i) not award any compensation in excess of the loss suffered by the complainant as a direct consequence of the cause of action; or (ii) not award compensation exceeding rupees thirty lakhs (including relevant expenses, if any). |
| 22 | Rule 17 A | No existing provision | Insertion of sub rule 17A | 17A. Appellate Authority. – There shall be an Appellate Authority to be constituted by IRDAI, immediately, but not later than six months from the date of publication of these rules to entertain any appeal made against the award passed by Insurance Ombudsman under Rule 17 of these rules and which shall consist of two members including one domain expert, to be decided by IRDAI. |
| 23 | Rule 18 | (1) The Ombudsman shall prepare an annual report detailing the activities undertaken during the previous financial year under their jurisdiction, statement of accounts and any other relevant information and submit to the Council for Insurance Ombudsmen with a copy to the Authority by the 30th June every year. | (2) The Council for Insurance Ombudsmen shall on receipt of annual reports of all Insurance Ombudsman, furnish a report containing a general review of the activities of Insurance Ombudsman during the preceding financial year and such other information as it may consider necessary, to the Central Government and to the Authority any time after the 30th June but not later than the 30th September, every year. | sub rule (1), the date “30th June” shall be substituted by “15th May” |
| 24 | Rule 19 | (1) An Advisory Committee consisting of eminent persons not exceeding five and including one Central Government nominee shall be constituted by the Authority to review the performance of the Insurance Ombudsman from time to time. | Rule 19 shall be substituted | 19. Advisory Committee. — (1) An Advisory Committee consisting of eminent persons not exceeding five and including one Central Government nominee, nominated by the Ministry of Finance, Department of Financial Services, shall be constituted by the Authority to review the performance of the Insurance Ombudsman & Appellate Authority from time to time. |
| 25 | Rule 20 | The Authority, in consultation with the Council for Insurance Ombudsmen, may recommend to the Central Government, proposals for effecting improvements in the functioning of the Insurance Ombudsman. | Proviso to Rule 20 shall be inserted | The Authority, in consultation with the Council for Insurance Ombudsmen, may recommend to the Central Government, proposals for effecting improvements in the functioning of the Insurance Ombudsman. |
A copy of the Draft Rules is attached herewith for your ready reference.
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