The consumer affairs secretary has stated that out of 5.53 lakh pending cases in consumer courts across the country, about 1.61 lakh cases are related to the insurance sector.
The insurance sector in India has been facing several challenges, leading to a significant number of consumer complaints and a high pendency of cases. The government, along with the Insurance Regulatory and Development Authority of India (IRDAI), has taken notice of this issue and is working towards finding a solution. In a recent roundtable conference, six major issues were flagged and discussed. These issues are among key stakeholders, including ambiguity in insurance contracts, inflexible policy terms, lack of decision-making power for insurance representatives, and more.
Introduction
The government has flagged six major issues in the insurance sector. The Govt has urged the regulator IRDAI (Insurance Regulatory and Development Authority of India) and other stakeholders to address these issues in order to reduce the huge pendency of consumer cases. The current situation has more than one-fifth of the total consumer complaints related to the insurance sector across the country.
Ambiguity in Insurance Contracts
The government has raised the concern of ambiguity in insurance contracts. It is one of the key reasons behind the huge pendency of consumer cases in the insurance sector. The consumer affairs secretary has stated that consumer cases can be reduced if the insurance policy terms and conditions are made simpler, clear, and in an understandable language.
Inflexible Policy Terms
Another issue raised by the government is the inflexible policy terms. The consumer affairs secretary has emphasized that it is important to create awareness among consumers that they should not sign the policy document without properly understanding the terms and conditions of the policy.
Lack of Powers Delegated to Representatives
The government has also pointed out the lack of powers delegated to representatives of insurance companies to take decisions during out-of-court settlements. This has been identified as another reason for the pendency of consumer cases in the insurance sector.
Policy Documents Not Shared with Consumers
The government has also raised the concern of agents not sharing full policy documents with consumers at the time of signing the policy. This has been identified as one of the key reasons behind consumer complaints in the insurance sector.
Repudiation of Claims on Basis of Pre-existing Diseases
Another issue raised by the government is the repudiation of claims on the basis of pre-existing diseases. This has been identified as one of the reasons for the pendency of consumer cases in the insurance sector.
Crop Insurance Claims Tied up with a Central Scheme
The government has also pointed out the crop insurance claims tied up with a central scheme, which is not flexible. This has been identified as another reason for the pendency of consumer cases in the insurance sector.
Conclusion
The roundtable conference was attended by Central Consumer Protection Authority Chief Nidhi Khare, senior officials from the Ministry, IRDAI, public and private insurance companies, consumer court commissions, and consumer organizations. The consumer affairs secretary has stated that out of 5.53 lakh pending cases in consumer courts across the country, about 1.61 lakh cases are related to the insurance sector. The government has urged IRDAI and other stakeholders to address these key issues in order to reduce the huge pendency of consumer cases in the insurance sector.
(India CSR)
