Draft IRDAI (Internal Insurance Ombudsman) Guidelines 2025 Issued

The Insurance Regulatory and Development Authority of India (IRDAI) has released a draft of the Internal Insurance Ombudsman Guidelines, 2025 aimed at facilitating the speedy resolution of policyholder grievances and strengthening the complaint management framework. The guidelines propose the establishment of an independent forum within insurers to handle complaints and will apply to all insurance companies (excluding reinsurers) that have completed at least three years since commencing operations.

As per the draft, insurers must appoint one or more Internal Insurance Ombudsman(s) who have at least 20 years of experience in the insurance sector, but who have never been associated with the appointing insurer. The individual must have held a position no lower than two levels below that of a board-level director. The guidelines lay down specific provisions regarding the ombudsman’s term, remuneration, and service conditions.

The internal ombudsman will serve as an apex independent body within the insurer, responsible for addressing complaints within a specified jurisdiction and for amounts up to ₹50 lakh. Complaints that remain unresolved beyond 30 days, or those rejected by the insurer and subsequently appealed by the complainant, will be reviewed by the ombudsman. The ombudsman is also expected to identify systemic patterns in complaints and report them to the Policyholder Protection, Grievance Redressal, and Claims Monitoring (PPGR & CM) Committee of the Board for appropriate policy-level interventions.

Complaints already pending before or disposed of by a court, consumer forum, or the Insurance Ombudsman will be outside the jurisdiction of the internal ombudsman.

An effort must be made to resolve matters through conciliation. Failing that, the ombudsman is required to issue a reasoned decision on merits within 15 days. The decision shall be unconditional and binding on the insurer. If the complainant is aggrieved, they may appeal to the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017, within 30 days.

Notably, the National Insurance Company had sought appointment of an Internal Ombudsman on a contractual basis in September 2022, signaling the beginning of this shift toward internal grievance resolution. The proposed guidelines also aim to reduce the burden on the Insurance Ombudsman, that has seen a sharp rise in complaints, particularly in the health insurance sector.