The Insurance Regulatory and Development Authority (IRDA) has decided to tighten supervisory control over the way insurance companies handle consumer complaints.

At a workshop organised recently to discuss consumer grievance management, the regulator unveiled software that it plans to introduce for the purpose. The software not only provides for immediate transfer of complaints registered with the authority to the insurers concerned, but also ensures online tracking of the progress of the complaint by both the complainant and the regulator. This would not only render the entire process of grievance redress transparent, but also ensure better scrutiny by the regulator. In addition, the data generated by the software will help the regulator assess the quality of service provided by the insurers and also identify grievance prone areas that require intervention by the regulator.

The IRDA regulation on the protection of policy holders’ interest mandates that every insurer put in place an effective mechanism for speedy redress of consumer complaints. If consumers are not satisfied with the redress offered by the in-house redress system of the insurer, they have the option to lodge a complaint with the insurance ombudsman. The IRDA too receives a number of complaints from consumers, which are forwarded to the insurers, but there is no system in place to track the progress of these.

Similarly, the regulator is dependent to a large extent on the inputs or statistics sent by the insurer to assess the quality of grievance redress offered. It is for this reason that the authority has come up with software that will facilitate better regulation of complaint redress. In due course, it plans to bring into this network the resolution of complaints by the ombudsmen too so that there is complete integration of the entire grievance redress mechanism of the industry.

IRDA chairman J. Hari Narayan said the complaints related to (a) marketing practices of insurers, (b) structure and terminology of the policy instruments, and (c) claim settlement. While the third category of complaints was mostly quasi-judicial in nature and to a large extent handled by the ombudsmen, the first category pertaining to market practices was entirely within the control of the insurer and the regulator would exhibit zero tolerance for unfair marketing practices. Issues pertaining to the second category may require specific consideration by the industry and the authority in order to ensure that ambiguities in policies are eliminated, he said.