The Council of Insurance Ombudsman Annual Report 2023-24 has revealed a significant rise in complaints against health insurance companies in India. The report shows that the total number of complaints against health insurance companies increased by 21.7% in FY 2023-24, with 31,490 complaints, compared to 25,873 in FY 22-23. Private insurers accounted for the majority of complaints, with 26,064 grievances, while public sector insurers had 5,298 complaints.
Star Health & Allied Insurance topped the list with the highest number of complaints, with 13,308 grievances, of which 10,196 were related to claim repudiations. Other top insurers with high complaint numbers included CARE Health Insurance, Niva Bupa Health Insurance, National Insurance, and New India Assurance. The report also highlights that claim repudiation is the most common grievance, with the majority of complaints falling under this category.
The Insurance Regulatory and Development Authority of India (IRDAI) has responded to the rising dissatisfaction by mandating every insurer to appoint an Internal Ombudsman (IO) to review cases up to Rs 50 lakh that remain unresolved after 30 days or are rejected by insurers. However, experts argue that the independence of the IO is questionable since they report to the insurer’s top management, which may raise concerns about fairness and impartiality.
The report emphasizes the need for stronger accountability, transparency, and consumer protection in the health insurance sector. Policyholders are advised to look beyond premiums when buying health insurance and consider critical factors such as claim settlement ratio, repudiation rates, grievance redressal track record, and customer service quality. The IRDAI’s initiative to appoint an Internal Ombudsman is a step towards addressing the rising complaints, but its effectiveness and independence remain to be seen.
The Council for Insurance Ombudsmen (CIO) plays a crucial role in providing an alternative grievance redressal platform for policyholders. The CIO functions under the IRDA Act, 1999, and the Redressal of Public Grievances Rules, 1998, and is designed to provide a speedy and cost-effective mechanism to resolve disputes against insurance companies, intermediaries, or brokers. The report highlights the need for informed choices and stronger regulation to restore policyholder trust in the health insurance sector.