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To address claims up to Rs 50 lakh, IRDAI proposes internal insurance ombudsman

The IRDAI proposed a new framework mandating internal insurance ombudsmen for insurers with over three years of operation. This framework aims to resolve customer insurance claims up to ₹50 lakh, improving grievance redressal. The ombudsman will report to the board for functional matters and the MD/CEO for administrative aspects.

IRDAI has proposed Internal Insurance Ombudsman Framework for claims upto Rs 50 Lakh
IRDAI has proposed Internal Insurance Ombudsman Framework for claims upto Rs 50 Lakh Credit:(irdai.gov.in)
| Updated on: Jul 25, 2025 | 05:05 PM

New Delhi: Insurance Regulatory and Development Authority of India (IRDAI) on Wednesday, 23rd July 2025, proposed a framework that requires appointing an internal insurance ombudsman for insurers to address the grievances involving claims up to Rs 50 lakh. To put it simply, this ombudsman will work to resolve complaints related to claims up to Rs 50 lakh.

The IRDAI releases the draft of the internal insurance ombudsman guidelines 2025, which proposes to set an independent and unbiased review framework within insurers in order to address unresolved or escalated complaints in a fair, transparent, and time-bound manner

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"Applicable to all insurers (except reinsurers) with more than three years of operations, the framework mandates the appointment of an internal insurance ombudsman to address complaints involving claims up to Rs 50 lakh," it said.

Insurance companies will also be allowed to have more than one ombudsman for each region so that coverage and accountability are maintained in every region. said the IRDAI draft that is open for comments till August 17th, 2025.

IRDA has also decided the qualifications, tenure, responsibilities, and salary of the ombudsman. As per the draft, the ombudsman will directly report to the company's board or the committee that monitors the protection and complaints of the policyholder, whereas for matters relating to administration, the ombudsman person would report to the MD or CEO of the company.

"To reinforce strong governance and oversight, it is proposed that the internal insurance ombudsman shall functionally report to the board or its policyholder protection, grievance redressal and claims monitoring committee, with administrative reporting to the MD/CEO," said IRDAI.

With this step of the internal grievance handling mechanism, IRDAI aims to further strengthen the trust of customers in the insurance sector.

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