The Insurance Regulatory and Development Authority of India (IRDAI) released the draft of the Internal Insurance Ombudsman Guidelines, 2025, on Wednesday, July 24. According to this, insurance companies must appoint an internal ombudsman to handle complaints related to claims up to ₹50 lakh.
Preparation to Increase the Speed of Complaint Settlement
IRDAI’s new draft aims to set up an independent and fair grievance redressal system within insurance companies. This will help in settling rising or pending complaints in a fast and fair way. These rules will apply to all insurance companies (except reinsurance companies) that have been running for more than three years.
Appointment and Responsibility of Ombudsman
Each insurance company must appoint at least one Internal Ombudsman. If needed, more Ombudsmen can be appointed region-wise to speed up complaint handling. In administrative matters, the Ombudsman will report to the MD or CEO, but functionally, they will be accountable to the Board or the Policyholder Protection and Grievance Committee.
IRDAI says that this dual reporting system will help keep the Ombudsman independent and ensure better monitoring. This step is expected to solve disputes within the company, avoiding the need to go to external Ombudsman offices or courts, which will build more trust in the insurance system.
What Will Be in the New Rules?
The draft clearly defines the Ombudsman’s qualifications, job period, salary, and duties. IRDAI has asked for public suggestions and feedback on the draft by 5 PM on August 17, 2025. The draft is available on the IRDAI website.
This proposal is part of IRDAI’s larger plan to shorten dispute resolution time and protect policyholders. It also pushes companies to become more accountable to their customers.