Introduction
Insurance is typically acquired in the expectation of loss, and the insured party needs it most in unfortunate circumstances, particularly when the insurer denies a claim or delays payment of a death benefit. India’s response has come in the form of the Insurance Ombudsman, who addresses the grievances of the insured against insurers and their agents at less cost than obtaining justice through the courts. The present framework is defined by the Insurance Ombudsman Rules, 2017 (the Rules),1 made by the Central Government under Section 24 of the Insurance Regulatory and Development Authority Act, 1999.2
The scheme is typically hailed as one of the best options available to policyholders, and to a great extent that is accurate. This paper, however, raises a different and tougher question. For a remedy to be effective in law, three things must be satisfied: access to the remedy, reasons for the decision, and enforceable compliance with it.
This paper contends that while the Ombudsman serves an important purpose, the remedy is not fully effective. The shortcomings stem less from the idea of informal justice than from specific, identifiable weaknesses in the design of the law surrounding the Ombudsman: the line between mediation and adjudication, enforcement and review, interaction with other forums, and transparency. The aim is to examine the disparity between the availability of the Ombudsman’s relief and its legal and practical efficacy. The method is doctrinal and comparative: the paper reads the amended Rules, the Council for Insurance Ombudsmen’s Annual Report for 2023-24, a parliamentary reply on non-compliance, three High Court rulings and the Draft Insurance Ombudsman (Amendment) Rules, 2025, and compares the Indian design with that of the United Kingdom; it is qualitative and does not measure policyholder satisfaction or any causal effect on insurance litigation. The paper first sets out the statutory framework, then analyses the four deficiencies, draws the comparison with the United Kingdom, proposes the necessary changes and concludes.
The statutory framework
The Rules enable a policyholder to complain against insurers and identified intermediaries on grounds including delay in settling claims, repudiation of claims (in whole or in part), disputes over premium, misrepresentation of policy conditions, and non-issuance of a policy after receipt of the premium.3 Normally, the complainant must first bring the grievance to the notice of the insurer in writing. If the insurer rejects the grievance or does not reply within one month, the complainant may approach the Ombudsman within one year, a period the Ombudsman may relax.4 A complaint is not maintainable if the same subject matter is pending before, or has been decided by, a court, consumer forum or arbitrator.5
The procedure has two stages. At the first, the Ombudsman tries to settle the dispute through mediation. If the settlement succeeds, the Ombudsman makes a recommendation, and once the complainant has accepted it, the insurer must implement it within fifteen days of receiving it.6 If mediation fails, the Ombudsman passes a written, reasoned award based on the pleadings and evidence. The compensation awarded may not exceed ₹50 lakh. The insurer must comply within thirty days and inform the Ombudsman.7 The Karnataka High Court has held that once mediation has failed, the Ombudsman must pass an award on the pleadings and evidence.8
Critical analysis: the four gaps
A. The boundary between mediation and award
The first gap lies in the line between Rule 16, which deals with recommendations, and Rule 17, which deals with awards. The Rules attach their strongest consequences, a thirty-day compliance duty and binding effect, to awards. A recommendation, although once accepted it must be implemented within fifteen days of the insurer’s receiving it, is not an award, and the binding effect stated in Rule 17 is not obviously attached to it. A complainant whose insurer ignores an accepted recommendation therefore has, on one reading, no direct remedy except to reopen the proceedings or to embark on long litigation. The Ministry of Finance’s 2025 draft amendments would let such a complainant return to the Ombudsman for an award, which implicitly concedes that the gap exists.9
The problem worsens when the classification is done wrongly in practice. In Puneet Singhal, the Delhi High Court held that an order described as a mediated decision under Rule 16 was not really a mediation at all, and directed that the complaint be considered under Rules 16 and 17.10 In Karan Tomar, the Delhi High Court quashed an order that left the dispute unsettled, and directed the Ombudsman to make tangible attempts at settlement and, if those failed, to pass an award with findings and reasons.11 The pattern in both cases is an order that ends the case without deciding the rights of the parties. Such an ending cannot be seen in the numbers, which is damaging to policyholders’ interests.
B. Enforcement and review
The second gap concerns what happens after a decision is made. An award binds the insurer, but the Rules do not prima facie treat it as a decree that can be executed. In practice, non-compliance is handled by the regulator or by the complainant. The data show that reported non-compliance is not common. Between April 2017 and February 2021 the Insurance Regulatory and Development Authority of India (IRDAI) received 91 complaints about non-compliance or delay, against 23,702 awards, or about 0.4 per cent.12 This figure should be read with care, because it speaks only of complaints that reached the IRDAI and says nothing about complainants who did not know where to go. It does show, however, that the gap is more a design issue than a widespread problem. A remedy that is rarely used could still determine whether the rest of the system remains reliable.
Review is the mirror image of this problem. The Rules provide no appeal against an award, so an aggrieved person must invoke the High Court’s jurisdiction under Articles 226 and 227,13 as the cases discussed above show. Writ proceedings are expensive and discretionary, which is hard to reconcile with a system meant to save policyholders from painful litigation. Those who cannot afford a writ must accept the Ombudsman’s decision even if it is flawed. Draft Rule 17A would set up an appeal against an award before an Appellate Authority. That draft had not been notified when this was written, and until it is notified the remedy stays incomplete on both sides.14
C. Forum choice and limitation
The third gap is how the Ombudsman route works with other remedies. Because a complaint usually cannot be entertained while the same issue is pending in another forum, a policyholder is forced to choose a forum. The Consumer Protection Act, 2019 keeps consumer remedies in addition to other laws and sets a two-year limit for a consumer complaint.15 Neither the Rules nor that Act excludes time spent before the Ombudsman from the limitation period that applies elsewhere. Section 14 of the Limitation Act, 1963 excludes time spent prosecuting a proceeding in good faith in a court that lacks jurisdiction.16 It is not clear whether that rule also covers time spent before the Ombudsman, which is an office and not a court. A policyholder who tries the Ombudsman route in good faith may find the formal route closed unless the forum agrees to condone the delay.
D. Transparency and accessibility
The fourth gap concerns evidence. The Council for Insurance Ombudsmen reports that in 2023-24 its 17 offices received 52,575 complaints and disposed of 49,705, nearly 87 per cent of them within ninety days of registration. Of the complaints disposed of, 12,855 were treated as non-entertainable.17 About 26 per cent of disposals therefore never reached the merits. Speed is important, but a headline figure that includes a quarter of cases closed as inadmissible says little about whether policyholders obtained relief. The Report’s detailed statements do break out the outcomes: 15,528 recommendations in mediation, 9,287 awards for complainants, 8,638 awards for insurers and 3,397 withdrawals.18 They do not, however, break the ninety-day figure down by outcome, so the speed of decisions on the merits cannot be separated from the speed of early closures. Nor does the Report’s list of online facilities mention a public database of awards; the facility it describes lets a complainant view and download an award using a registered mobile number.19 Because of this, one cannot fully test how effective the system really is.
Those closures might show that some complaints were truly ineligible. They might also show that complainants made mistakes because they did not know the requirements, which include a written complaint to the insurer, supporting documents and a time limit. Having no fees does not take away these burdens, which are likely to fall hardest on elderly people and those not comfortable with digital tools. The Report’s classification of complaints received, which counts 12,642 as non-entertainable, gives some indication: 6,552 had not first been taken to the insurer, 2,851 fell outside the Ombudsman’s territorial jurisdiction, 2,382 were beyond the scope of the Rules, 740 were out of time and 117 were pending before another court or forum.20 More than half of these complaints thus failed at that first step, which is consistent with such mistakes. The classification records the ground for treating a complaint as non-entertainable and not why the complainant missed the requirement, so this conclusion is only tentative. The main point is that the reporting does not record the cause, so the question cannot be fully tested.
A comparative study between India and the United Kingdom
The Financial Ombudsman Service (FOS) in the United Kingdom offers a comparison on four key points. The first is the standard. The FOS ombudsman looks at what is fair and reasonable in all the circumstances of the case, taking into account the law, rules and good industry practice.21 This is a fairness mandate. The Indian Ombudsman, by contrast, decides an award from the pleadings and evidence, and the substantive standard is not stated directly; Rule 16(1) speaks of what is fair for a recommendation, and Rule 15, though headed “to act fairly and equitably”, deals with procedure. The second is binding effect. An FOS final decision binds a firm only if the complainant accepts it; if the complainant does not accept it, the complainant may still be able to go to court.22 The third is enforcement under the law. A money award from the FOS can be enforced by county court order, so if the firm does not pay, civil enforcement can be used instead of only regulatory action.23 The last is openness. The FOS publishes its decisions on the web so that consumers and firms can see how similar disputes are resolved.24
The comparison needs some qualification. The FOS is based on primary legislation, while the Indian Ombudsman derives from delegated legislation under Section 24 of the Insurance Regulatory and Development Authority Act, 1999. This may limit what the Rules alone can achieve; decree-like enforceability, for example, might need statutory backing.
The UK experience still shows features India may adapt: enforceability, a fairness standard and published decisions.
Suggestions
The analysis points to five main changes, most of which can be made by changing the Rules and the way things are handled.
1. Make the line between mediation and award clear. Adopt the part of the 2025 draft that lets a person seek an award if a recommendation is not complied with, and require any order recording mediation to state what was agreed and that the person agrees, so that an order can be called a settlement only if one actually happened.
2. Complete the chain of enforcement and review. Adopt an appeal system like draft Rule 17A, and consider, with statutory backing if needed, a way to execute an award without starting fresh legal proceedings.
3. Remove the limitation problem. State clearly that time spent in good faith before the Ombudsman is excluded in computing limitation for any consumer complaint, and require the Ombudsman’s response to explain what follows from choosing this forum.
4. Make things more open. Require the Council for Insurance Ombudsmen to add to the outcome and closure data it already reports by showing the time taken for each kind of outcome and the reasons for closures where they can be recorded, and to publish awards without names.
5. Give help locally. Law school legal aid groups, charities and local groups can help people approach the Ombudsman by explaining, in simple and local languages, why they usually must go to the insurance company first, which papers to save (the policy, the form, the letters and the rejection notice) and what time limits apply.
The local plan is meant to be small. It only raises awareness in the community and helps with papers, the insurance company’s complaint process, the Ombudsman where possible, and follow-up. A group would not promise anything about a claim. A small pilot with one law school and one local group could be measured by how many people were helped, how many complaints were filed correctly, how many mistakes occurred and what people said. The result would help test the supposition about mistakes in the process raised in the discussion of transparency and accessibility above.
Conclusion
The Insurance Ombudsman is a significant effort that has made progress in making insurance dispute resolution easier and faster for people. Being effective in law, however, depends not only on good intentions but also on how the system is built. The current Rules do not clearly separate what a recommendation is from what an award is. They rely on the regulator’s discretion to enforce decisions and depend on writ jurisdiction for review. They also do not match up with the time limits that apply in legal forums. These problems can be fixed. The 2025 draft shows that policymakers are aware of some of them. The example from the UK shows that enforceability, a fairness standard and publicly available decisions are practical parts of a strong ombudsman system. Policyholders will truly benefit only when the process is easy to understand, when decisions can be enforced and when they can be reviewed in a reasonable way.
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Footnotes
1. Insurance Ombudsman Rules, 2017, G.S.R. 413(E) (Apr. 25, 2017) (India) [hereinafter Rules], as amended by G.S.R. 785(E) (Aug. 17, 2018) (India), Insurance Ombudsman (Amendment) Rules, 2021, G.S.R. 147(E) (Mar. 2, 2021) (India), Insurance Ombudsman (Second Amendment) Rules, 2021, G.S.R. 334(E) (May 18, 2021) (India), and Insurance Ombudsman (Amendment) Rules, 2023, G.S.R. 828(E) (Nov. 9, 2023) (India).
2. Insurance Regulatory and Development Authority Act, 1999, § 24, No. 41 of 1999 (India).
3. Rules, supra note 1, r. 13(1).
4. Id. r. 14(3)–(4).
5. Id. r. 14(5).
6. Id. r. 16.
7. Id. r. 17(1)–(8).
8. Sri M.V. Narasimha Prasad v. Office of the Insurance Ombudsman (Karnataka), W.P. No. 26221 of 2024, NC: 2026:KHC:17542, ¶ 8 (Kar. HC Mar. 27, 2026) (India), aff’d, Office of the Insurance Ombudsman (Karnataka) v. Sri M.V. Narasimha Prasad, W.A. No. 1534 of 2026, NC: 2026:KHC:32548-DB, ¶ 11 (Kar. HC July 1, 2026) (India).
9. Draft Insurance Ombudsman (Amendment) Rules, 2025, G.S.R. 864(E) (Nov. 25, 2025) (India) (unnotified draft), proposed proviso to r. 16(3); see Indranath Bishnu, Shravan Belsare & Raajash Kulmi, Insurance Ombudsman and the Case for Consent-Based Mediation, India Corp. L. (Cyril Amarchand Mangaldas) (June 22, 2026), https://corporate.cyrilamarchandblogs.com/2026/06/insurance-ombudsman-and-the-case-for-consent-based-mediation/.
10. Puneet Singhal v. Insurance Ombudsman, W.P.(C) 1335/2025 (Del. HC Feb. 3, 2025) (India).
11. Karan Tomar v. Insurance Ombudsman, W.P.(C) 10643/2024, 2024 SCC OnLine Del 5979 (Del. HC Aug. 20, 2024) (India).
12. Ministry of Fin., Dep’t of Fin. Servs., Amendment in Insurance Ombudsman Rules, Rajya Sabha Unstarred Question No. 3087 (answered Mar. 23, 2021), https://sansad.in/getFile/annex/253/AU3087.pdf?source=pqars.
13. India Const. arts. 226, 227.
14. Draft Insurance Ombudsman (Amendment) Rules, 2025, supra note 9, proposed r. 17A.
15. Consumer Protection Act, 2019, §§ 69, 100, No. 35 of 2019 (India).
16. Limitation Act, 1963, § 14, No. 36 of 1963 (India).
17. Council for Insurance Ombudsmen, Annual Report 2023-24 (2024), https://cioins.co.in/annualreports/AnnualReport2023-2024.pdf.
18. Id., Statement L1G1H1.
19. Id., Major Online Facilities.
20. Id., Statement L7G7H7.
21. Fin. Conduct Auth., FCA Handbook, DISP 3.6.1R, 3.6.4R (UK); Financial Services and Markets Act 2000, c. 8, § 228(2) (UK).
22. Financial Services and Markets Act 2000, c. 8, § 228(5)–(6) (UK); Fin. Ombudsman Serv., Our Powers and How We Resolve Complaints, https://www.financial-ombudsman.org.uk/who-we-are/make-decisions (last visited Oct. 12, 2026); see also Fin. Ombudsman Serv., How We Settle Unresolved Financial Disputes, https://www.financial-ombudsman.org.uk/free-fair-final (last visited Oct. 11, 2026).
23. Financial Services and Markets Act 2000, c. 8, §§ 225–234, including § 229(8)(b), & sch. 17, ¶ 16 (UK).
24. Fin. Ombudsman Serv., Our Powers and How We Resolve Complaints, https://www.financial-ombudsman.org.uk/who-we-are/make-decisions (last visited Oct. 12, 2026).