The General Insurance Corporation (GIC) will shortly institute the post of an insurance ombudsman to meet the changing demands of people who take cover under the general insurance industry.
GIC's decision has been prompted by the recent appointment of ombusmen in the banking industry, immediately after the recommendations of the Narasimham Committee Report-I on banking & financial sector reforms.
The general insurance ombudsman will be empowered basically to take note of and dispose of complaints of personal claims. The personal claims of the insured public not exceeding Rs 10 lakh will come under the purview of the insurance ombudsman.
GIC's decision to appoint an ombudsman is likely to be implemented soon and well before the Insurance Regulatory Authority (IRA) is given legal teeth. The government will soon introduce a bill to make IRA a statutory body with specific powers and authority.
GIC's decision is influenced by the developments in the banking industry.
The Narasimham committee examined the critical areas of the banking industry. As a part of the financial sector policy and reforms the introduction of "Banking Ombudsman Scheme 1995" was suggested. In the context of increasing pace of liberalisation in the banking and financial sectors, the needs of the bank customers have undergone a sea change. There was a growing awareness amongst the customers, particularly about their rights. The Narasimham Committee's first report had taken cognisance of these changing needs of the customers while suggesting appointment of ombudsmen. Following this report, the then-RBI Governor, C Rangarajan, instituted the Banking Ombudsman Scheme on June 14,1995. The scheme was framed under the provision of the Banking Regulation Act 1949 which covers all the scheduled commercial banks and scheduled primary co-operative banks having business in India.
It is gathered that GIC, which is the general insurance holding company, will rely heavily on the scheme of the banking industry.
