Insurers Must Monitor, Prevent Product Mis-Selling: Insurance Ombudsman Delhi

Sunita Sharma, the Insurance Ombudsman for the Delhi region has said that Insurance companies must vigilantly monitor instances of mis-selling.

Emphasising the paramount importance of customers, she remarked that insurers owe their existence to customers and should actively avoid the mis-selling of products.

Sharma, a former Managing Director of LIC, noted that companies typically engage with customers up to the free look period, disappearing thereafter, as claims of mis-selling cannot be made beyond that point.

Policyholders are granted a minimum period of 15 days (30 days for electronic policies and those sourced through distance mode) from receiving the policy to review its terms and conditions, with the option to return it if deemed unacceptable.

The Insurance Ombudsman serves as a quasi-judicial grievance redressal mechanism for complaints against life and non-life insurance companies.

Highlighting delays in receiving Self Contained Notes (SCN) from insurers, Sharma recommended that these be dispatched to customers within the stipulated 10-day timeframe.

Additionally, she called for a reassessment of the role of Third Party Administrators (TPAs), as insurers are often influenced by them.

In the fiscal year 2022-23, the total number of complaints across all 17 Insurance Ombudsman Offices reached 55,946, with 92.28 per cent (51,625) of them being resolved.

Sharma reported that the Delhi center successfully addressed all 5,257 complaints received during the same period, sharing this information while engaging with various stakeholders to commemorate Bima Lokpal Day.

November 11 is celebrated as the foundation day of the establishment of the 'Insurance Ombudsman' institution.