Health Insurance Complaints 2023-24 revealed by Insurance Ombudsman: Find top insurers with maximum grievances, claim repudiations, and IRDAI’s response to rising policyholder issues.
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NEW DELHI: Health insurance is designed to provide financial protection in times of medical emergencies, but for many policyholders, the reality is far from reassuring. Despite diligently paying premiums, individuals often face situations where their claims are either denied outright or settled for a negligible sum. This leads to significant financial and emotional distress during already challenging circumstances.
The Council of Insurance Ombudsman Annual Report 2023-24 highlights a sharp rise in complaints, with Star Health leading in grievances, mostly related to claim repudiations. Despite IRDAI introducing an Internal Ombudsman mechanism, concerns remain about its independence and effectiveness. The trend reflects a pressing need for stronger accountability, transparency, and consumer protection in the health insurance sector.
Let’s dive into which insurers drew the most grievances, what’s causing the spike, and how IRDAI is stepping in.
Surge in Complaints: Who Tops the List?
The CIO report shows a sharp increase in grievances against health insurers. In FY 2023-24, total complaints against health insurance companies rose by 21.7%, reaching 31,490, compared to 25,873 in FY 22-23. Private insurers dominated the complaint charts, with 26,064 complaints, while public sector insurers accounted for 5,298.
Among companies, Star Health & Allied Insurance recorded the highest number of complaints (13,308), of which 10,196 were related to claim repudiations. CARE Health Insurance followed with 3,718 complaints, and Niva Bupa Health Insurance with 2,511 complaints. Even public sector giants like National Insurance (2,196 complaints) and New India Assurance (1,602 complaints) made it to the top five.
On a relative scale, Star Health’s performance was worse. Per lakh policyholders, it recorded 63 complaints, compared to Niva Bupa’s 17 and CARE Health’s 16. Public insurers fared better, with National Insurance at 5 and New India Assurance at just 1 complaint per lakh policyholders.
Why Are Claims Being Rejected?
The majority of complaints fall under claim repudiations, cases where insurers either fully reject or partially settle claims. Under Rule 13(1)(b) of the Insurance Ombudsman Rules, 2017, such matters are within the ombudsman’s purview.
Breakdown of repudiation complaints in FY 2023-24:
- Star Health – 10,196
- CARE Health – 2,393
- Niva Bupa – 1,770
- National Insurance – 1,419
- Aditya Birla Health – 1,006
The ombudsman passed awards in many such cases. For Star Health alone, compensation was awarded in 7,506 cases, amounting to Rs 6,054.18 lakh.
IRDAI’s Response: Appointment of Internal Ombudsman
To address this rising dissatisfaction, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated every insurer to appoint an Internal Ombudsman (IO). This official will review cases up to Rs 50 lakh that remain unresolved after 30 days or are rejected by insurers.
While this may speed up grievance redressal, experts argue that independence is questionable since the IO reports to the insurer’s top management. This raises concerns about fairness and impartiality, possibly creating overlap with the existing ombudsman system.
The Policyholders Perspective
- Star Health leads in complaints both in absolute and relative terms.
- Claim repudiation is the most common grievance.
- Private insurers account for the bulk of rising complaints.
- IRDAI’s Internal Ombudsman is a new step, but its independence remains debatable.
When buying health insurance, customers must look beyond premiums. Critical factors include:
- Claim Settlement Ratio (CSR)
- Repudiation rates
- Grievance redressal track record
- Customer service quality
Health insurance should ease financial worries during medical crises, not add to them. Informed choices and stronger regulation are key to restoring policyholder trust.
Council for Insurance Ombudsmen
The Office of the Insurance Ombudsman was established by the Central Government under the IRDA Act, 1999, and the Redressal of Public Grievances Rules, 1998, with its framework defined in the Insurance Ombudsman Rules, 2017.
It functions under the Council for Insurance Ombudsmen (CIO) as per the said Rule, and serves as an alternative grievance redressal platform. It is designed to provide policyholders with a speedy and cost-effective mechanism to resolve disputes against insurance companies, intermediaries, or brokers.
Qualification: Must have experience in insurance, civil, administrative, or judicial services.
Selection: Done by a committee headed by the IRDAI Chairperson, with representatives from the Life and General Insurance Councils and the Government of India.
Term: Three years, extendable, but not beyond the age of 70.
Functions: Acts as mediator and counsellor in disputes (with parties’ consent) and handles grievance redressal referred by IRDAI.
Annual Report 2023 – 2024
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