Tuesday, August 23, 2011

Insurance companies ignoring customer complaints, to pay penalties

Insurance Regulatory Authority of India (IRDA) has fined New India Assurance (NIA), an amount of Rs. 1 lakh for not replying to a client. IRDA had tried to communicate with NIA which was further ignored for 2 months.

Hemendra Mehta had been living abroad for a few months now. However he had still been paying medical insurance premium amount for the aforementioned months. He filed a query where he had asked the company to refund him the amount. NIA provides extension on the policy in such cases. But in this case no refund would have been made.

Now the problem starts after the grievance was filed. Hemendra received a mail which clearly stated that the refund will be considered. But when the Divisional Manager of the branch realized the folly he just stopped the communication. IRDA after 4 months of no action sent a letter to the head office of NIA. This was further ignored for another 2 months.

NIA finally refunded the amount to the policy holder after a total of 7 months. The Insurance provider made it look like they did a favor to the policy holder and the IRDA. IRDA responded with a Rs. 1 lakh fine.

The Divisional Manager is under investigation now.

Although one must keep in mind that this is just one instance of justice. IRDA is notorious for late replies. You have to wait 6 months to get an appointment with the Insurance Ombudsman in Mumbai. There position for an Ombudsman in Ahmedabad has been empty for the past 9 months.

But this case might be the delicate flame of light at the end of the tunnel. This is an encouraging step taken by the IRDA which will bring some positive changes in the Insurance sector.

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