Industry Odisha Bureau, October 18: IRDAI’s proposed distribution reforms have centred on agents and commissions. Yet health insurance complaints to the Ombudsman rose 263% in five years. Experts want fairer grievance redressal and stronger insurer accountability.*
Health insurance complaints to the Insurance Ombudsman rose 263% between FY21 and FY25. The surge is sharpening debate over IRDAI’s proposed distribution reforms. So far, that debate has centred on agents, commissions and distribution costs. Critics fear agents and point-of-sales persons, or POSPs, could exit, hurting penetration and service. Consumer advocates argue claims settlement deserves equal attention.
For policyholders, the core question is whether valid claims get paid. Partial or total repudiation, meaning claim rejection, drove 96% of health complaints. That share describes complaints, not the overall rate at which claims are rejected. Life insurance complaints fell 5% over five years but rose 15% in FY25. Misrepresented policy terms accounted for 59% of them.
Shilpa Arora, co-founder and COO of Insurance Samadhan, said mis-selling often surfaces late. Some traditional policies sold as fixed deposits are exposed only years later, she said. By then, Ombudsman complaints may be rejected because the policy is too old.
IRDAI’s consultation paper said 63% of FY26 complaints resolved via Bima Bharosa favoured policyholders. The share was 75% at the Ombudsman and 54% in consumer forums and courts. These forums handle different cases, so the figures are not directly comparable. Kshitij Jain, co-founder of Nyvo Insurance Services, said some rejections may be unjustified. Many customers may never contest them, he added, eroding faith in insurance.
Contesting a claim can mean passing through several layers. These include the insurer’s grievance redressal officer, Bima Bharosa, the Ombudsman and consumer courts. Customers often resubmit documents and restate their case at each stage. Arora wants one complaint ID to follow a case throughout. She said platforms such as Bima Sugam and the Public Insurance Registry could help.
Insurers must honour an Ombudsman award within 30 days. Otherwise they owe the complainant ₹5,000 a day. Experts say enforcement can be difficult, with some insurers complying only partly. Arora cited insurers paying claims after losing, then cancelling the policy on the same grounds. Her example involved alleged non-disclosure of a pre-existing disease. With no review mechanism, policyholders cannot return to the Ombudsman, she said.
Bejon Misra, a former Ombudsman advisory committee member, wants insurers to pay for avoidable disputes. Insurers now fund Ombudsman costs by turnover; he would link contributions to complaints. Avdesh Mishra of SEBI-registered Avdesh Mishra Capitals blames insurers’ systems, not just agents. He questioned why insurers approve 20–30-year products for elderly buyers. He wants top management held responsible for such mis-selling.
The General Insurance Council has proposed a mandatory 10% co-payment on retail health cover. Jain argues hospital overcharging should be tackled before policyholders bear more costs.
IRDAI also proposes raising agents’ minimum qualification from Class 10 to Class 12. Training would rise from 75 to 100 hours. Mishra wants tougher exams and continuous training. Jain backs commission clawbacks for agents linked to non-disclosure denials.
Distribution reform still matters for access and affordability. But trust will rest on paying valid claims and resolving disputes fairly.
