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Just who is an Ombudsman?

August 25, 2009 17:23 IST

Many a times when you might have had issues with some service such as insurance, banking, et cetera, you might come across the term 'Ombudsman' while trying to ensure the redressal of your grievances. But what do we know about the ombudsman?

Do we know where the concept originated and why? Do we know what they do and how they can help consumers like us? This article tries to answer some basic questions regarding 'Ombudsman'.

Who is an Ombudsman?

An Ombudsman is a person who acts as a trusted intermediary between an organisation and some external constituency while representing the broad scope of constituent interests. The term originated in Sweden in the 19th century.

Simply put, an Ombudsman is an authority who is empowered to investigate individual complaints against public authorities, departments, etc. and even private sector companies. They are designated neutral or impartial dispute resolution practitioners whose major function is to provide confidential and informal assistance to private and public bodies and/or the clients of these bodies.

The government of India has designated several Ombudsmen (sometimes called chief vigilance officer or CVO) for the redressal of grievances and complaints from individuals in the banking, insurance and other sectors being serviced by both private and public bodies and corporations. The CVC (Central Vigilance Commission) was setup on the recommendations of Santhanam Committee (1962-64).

What sectors do they service?

Ombudsmen have traditionally been like middlemen between the government and the public to ensure that matters pertaining to public grievances are resolved amicably. However, their success in handling such situations has given rise to their use on almost all industries.

What powers do they have?

Ombudsmen have powers which help them in resolving client issues. These powers may vary from industry to industry. For example, an Insurance Ombudsman has two types of functions to perform -- conciliation and award making. The Insurance Ombudsman is empowered to receive and consider complaints in respect of personal lines of insurance from any person who has any grievance against an insurer.

The complaint may relate to any grievance against the insurer i.e. (a) any partial or total repudiation of claims by the insurance companies, (b) dispute with regard to premium paid or payable in terms of the policy, (c) dispute on the legal construction of the policy wordings in case such dispute relates to claims; (d) delay in settlement of claims and (e) non-issuance of any insurance document to customers after receipt of premium.

An Ombudsman's powers are restricted to insurance contracts of value not exceeding Rs 20 lakh (Rs 2 million).  The insurance companies are required to honour the awards passed by an insurance Ombudsman within three months.

Are they helpful to consumers?

Ombudsmen are appointed basically to address public grievances. Hence, the general public has an authority for addressing their issues. As this authority is appointed by the government, they have enough powers vested in them to resolve issues effectively.

You can learn more about Ombudsmen, by talking to the officials of the company with whom you have a grievance. As always, you need to make sure that you have everything in place in terms of records of complaints and the basic steps you have taken in getting the issue resolved.


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