The Insurance Regulatory and Development Authority of India (IRDAI) has suggested a new requirement for all insurers to designate an Internal Ombudsman (IO), as per draft guidelines issued on July 25, 2025. This action seeks to enhance the effectiveness of grievance resolution, minimize wait times, and provide a more autonomous review stage prior to external intervention. The draft will be available for comments until August 17 and is anticipated to be put into effect by December 31, 2025. The IO will be a senior, autonomous professional designated by the insurer but accountable to a committee or chairperson at the board level—not the CEO. The IO will examine complaints dismissed by the insurer’s grievance redressal officer (GRO), with decisions that are mandatory for the insurer. Policyholders may still pursue escalation to an external ombudsman or court. The IO will manage claims-related grievances up to ₹50 lakh, not including fraud or criminal matters. IRDAI has implemented measures to avoid bias, such as independent reporting systems and salaries not tied to performance. Although the initiative offers quicker, more equitable resolutions, experts warn that recruiting qualified IOs and reorganizing workflows could prove difficult, particularly for smaller insurers. Nonetheless, the action represents a significant advancement in improving policyholder security and bolstering confidence in the insurance framework.
