Centre asks insurance companies to reduce piling up of consumer cases

The Consumer Affairs Ministry, at a meeting with stakeholders in the insurance sector including the IRDAI, flagged key concerns to reduce the number of pending cases at various consumer commissions. Some of the issues that were flagged by the Centre included ambiguity in terms of insurance policies, repudiation of health insurance claims due to pre-existing diseases, lack of information regarding eligibility conditions for insurance policies besides issues regarding crop insurance.

Speaking to mediapersons, Rohit Singh, Secretary, Department of Consumer Affairs said, “We analysed the cases that are pending in various consumer commissions. Out of the 5.78 lakh pending cases, nearly 1.61 lakh pertain to the insurance sector. This indicates that there is a systemic issue and the deliberations were held to discuss measures to address key consumer concerns.”

He said simplification of the insurance documents is required so that consumers can better understand the terms and conditions  especially regarding exclusions and inclusions.

Pointing to health insurance policies, Singh said that pre-existing disease disclosure conditions are often not properly understood by consumers leading to rejection of claims. The Ministry officials also raised concerns about lack of awareness among consumers regarding crop insurance rules which are linked with government schemes.

Authorised personnel

“One of the key concerns discussed was also the fact that often the representatives of insurance companies delegated for mediation and out-of-court-settlement proceedings, are not empowered to make decisions. We have asked insurance companies to ensure their representatives are authorised to make such decisions so that such cases can be resolved in a timely manner,” Singh explained.

The Ministry also raised concerns regarding quality of engagement of intermediaries or agents with consumers. “Often the agents and intermediaries, do not give consumers complete information when selling the insurance policies,” he added.

“During the deliberations it was suggested that technology tools can be used for addressing consumer concerns. It was also discussed that steps should be taken to ensure that consumers are clearly informed about the requisites of the insurance contract so they have complete knowledge about the insurance policy and there is also need for strengthening internal grievance redressal systems,” Singh added.

The insurance cases pending at the consumer commissions pertain to various categories such as travel insurance, life insurance, home insurance, car insurance, marine Insurance, fire Insurance, crop insurance and medical insurance.