The Insurance Ombudsman passed an award in my favour, but the insurer hasn't complied. Is the insurer penalised for the delay, and how much is it?
1 Answers
Most people don't know this penalty exists. I didn't either, until I read the IRDAI Master Circular properly.
The rule
IRDAI Master Circular on Protection of Policyholders' Interests, 2024. Ref: IRDAI/PP&GR/CIR/MISC/117/9/2024 dated 05.09.2024. Chapter VII, clause 25.4.
What it says:
- The insurer must comply with an Ombudsman award within 30 days of receiving it.
- If it does not, Rs 5,000 per day is payable to the complainant for every day of delay.
- This is on top of penal interest under the Insurance Ombudsman Rules, 2017.
- It does not apply if the insurer files an appeal within 30 days.
The same wording is repeated in the health, life and general sections of the circular.
Why this matters
If an insurer ignores an Ombudsman award in your favour, you are owed Rs 5,000 a day. That is a real entitlement in a real circular.
But on IRDAI's own answers, there is no process to work it out, no one tracking it, and no record of it ever being paid. If you want it, you will have to ask for it yourself, in writing, and probably pursue it in a consumer forum.
Worth knowing before you need it.
If you want to read more, I'm documenting everything on BimaFiles
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