At Rs 1,000 per claim, National Insurance plans to hire an internal mediator

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CHENNAI: In an effort to reduce the costs of claims litigation, individual policyholders complain to the Insurance Ombudsman, the government-owned National Insurance Company Ltd has decided to hire an internal ombudsman.

According to the company, the internal mediator must handle all claims relating to quantum disputes arising from a complaint.

The internal ombudsman is required to strengthen the grievance mechanism and reduce complaints to the insurance ombudsman and anticipate litigation in the judicial and quasi-judicial forums.

According to the scheme, complaints can be lodged directly by the insured with the internal ombudsman or transmitted by the national insurance.

Currently, an aggrieved individual policyholder can approach the Insurance Ombudsman with a complaint after exhausting the insurers’ internal grievance mechanism.

It is unclear whether a dissatisfied insured will now have to go to another level – the internal mediator – before going to the insurance mediator.

In addition, it is also unclear whether the internal ombudsman will also rule on disputed claims from non-individual policyholders.

In any case, National Insurance wants retired general managers or similar, from any general insurance company / insurance regulator, other than its own.

The appointment is of a purely contractual nature for a fixed term of at least three years but not exceeding five years.

According to National Insurance, consolidated fee will be paid on a case by case basis at Rs.1,000/- and in exceptional/high value cases, additional fee may be considered based on the merits and complexity of the case per the Director General. at the head office but not exceeding Rs.5,000.

In the event of a visit to the regional offices, visit and other costs will be applicable according to the rights of the general manager of the company, the insurer said.

Laughing at the per-case charge of Rs.1,000, a retired managing director of a government-owned non-life insurer told IANS it was not known that retired managing directors are available at so cheap. Perhaps an on-duty official can also be paid per file.

The moot question now is what does the General Manager of National Insurance in charge of grievance redress do that warrants an internal ombudsman. Does this go as far as parking for some retired civil servants resulting in additional expense for the insurer.

It should be noted that the Internal Ombudsman will be provided with secretarial staff to assist him in his daily work, which means a permanent position headed by a temporary hand.

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