The Insurance Regulatory and Development Authority of India (“IRDAI”) has issued the draft IRDAI (Internal Insurance Ombudsman) Guidelines, 2025 (“Draft Guidelines”) dated July 23, 2025, with the objective to facilitate effective and speedy resolution of grievances and to further improve the standards of the complaint management system.The Draft Guidelines were shared with the General Insurance and Life Insurance Councils on August 25, 2023, and the suggested comments have been incorporated into the Draft Guidelines.Also, the suggestions of the Advisory Committee constituted under Rule 9 of the Insurance Ombudsman Rules, 2017 have been incorporated accordingly into the Draft Guidelines.All stakeholders are invited to submit comments and suggestions on the proposed Draft Guidelines to Mr. D Rajanikant, Manager at rajanikanth@irdai.gov.in with a copy to Shri Gautum Kumar, General Manager at gautum@irdai.gov.in latest by 5:00 PM on August 17, 2025 in the following format:
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The salient features of the Draft Guidelines are as follows:
Objectives
The objective of the Draft Guidelines is to enhance policyholder trust, strengthen insurers’ complaint management through an independent forum of grievance, and improve market conduct and service delivery.1. Applicability
The Draft Guidelines apply to all insurers (excluding reinsurers) with over three years of operational experience and will take effect three months from the date of issuance. The Guidelines shall be reviewed annually unless an earlier review, amendment, or repeal is required.2. Appointment / Remuneration of Internal Insurance Ombudsman (“IIO”) of an Insurer
- The appointment of the IIO shall be for a fixed period of three years or until attaining the age of 70 years, with a minimum entry age of 55 years.
- The candidate shall have at least 20 years of experience in the insurance sector, have held a position two levels below a Board Director, and have no ties to the insurer or its group to which they are appointed.
- Reappointment for one additional three-year term is allowed, subject to a maximum of two terms.
- The insurer shall notify the Authority within 15 days of the appointment using the format specified in the Master Circular on Corporate Governance for Insurers, 2024 for KMPs in Form KMP-1.
- The insurer shall initiate the appointment process well in advance to ensure that the vacancy is filled before the tenure of the existing IIO expires.
- If a vacancy arises unexpectedly, a new IIO shall be appointed within three months.
- Insurers may appoint multiple IIOs with clearly defined jurisdictions.
- The Board shall determine the fixed remuneration of the IIO, and no variable or performance-based incentives shall be paid.
- The remuneration shall remain unchanged during the tenure except for a pre-approved annual increase approved by the Board.
3. Reporting of the Internal Insurance Ombudsman
The Internal Insurance Ombudsman shall report administratively to the Managing Director/CEO and functionally to the Board or the Policyholder Protection, Grievance Redressal and Claims Monitoring (PPGR&CM) Committee of the Board.4. Removal / Dismissal of the Internal Insurance Ombudsman
The appointed Internal Insurance Ombudsman, during the term of service, may be removed only on justifiable grounds with the approval of the PPGR&CM Committee of the Board.5. Role and Responsibility of the Internal Insurance Ombudsman
The IIO shall:- Function as an independent apex body of the insurer, responsible for addressing complaints within its jurisdiction.
- Have the authority to adjudicate complaints involving amounts up to Rs. 50 lakhs.
- Facilitate the settlement of complaints through conciliation or mediation between the complainant and the insurer, agent, or intermediary.
- In cases where conciliation or mediation fails, decide the matter on its merits after providing both parties an opportunity for a hearing.
- Consider complaints that have either not been responded to by the insurer within 30 days or have been rejected by the insurer and subsequently appealed to the IIO.
- Analyze complaint trends, recommend actions to address root causes, and suggest policy changes. Findings shall be reported to the PPGR&CM Committee at least semi-annually.
- Not maintain complaints on matters pending before or already resolved by any court, consumer forum, or Insurance Ombudsman.
6. Procedure for Complaint Redressal by the Internal Insurance Ombudsman
- A complaint shall be filed with the IIO only after the complainant has submitted a representation to the insurer and either the complaint has been rejected or no response has been received within 30 days.
- The complainant shall refer the insurer’s decision to the IIO for review, with complaint details being transferred within three days through the automated Complaints Management Software.
- Where a complainant approaches the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017, the insurer shall include the decision of its Internal Insurance Ombudsman in its response.
- The insurer shall provide the necessary infrastructure and administrative support required by the IIO to effectively discharge its functions.
7. Closure of Complaints
- The IIO shall first attempt settlement through conciliation. If the complaint remains unresolved within seven days (or such extended period as may be permitted), the matter shall be decided on its merits.
- The insurer, agent, or intermediary shall provide all documents requested by the IIO without delay.
- The IIO shall consider the evidence presented, relevant statutory provisions, guidelines issued by the Authority, and any other factors deemed relevant to the complaint.
- The Internal Insurance Ombudsman shall issue a reasoned decision in every case, which shall be binding on the insurer, and shall not issue any conditional decisions or awards.
- Complaints should be resolved within 15 days, and the decision shall be communicated to both parties within three days.
- The insurer shall implement the decision within seven days. If there is any delay, interest at the applicable bank rate plus 2% (as prescribed under the Master Circular, 2024) shall be payable from the date of claim intimation until the date of actual payment.
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