About The Ombudsman Scheme
The objective of the Sri Lanka Insurance Ombudsman scheme is the satisfactory settlement of complaints/disputes that policy holders of insurance companies (the insured) may have against the company that sold them the insurance policy (the insurer).
- About the Ombudsman Scheme
- Establishment of Ombudsman
- Scope of Ombudsman’s Powers
- Qualifications of Ombudsman
Any award/decision given by the Insurance Ombudsman upto a sum of Rs. 1,000,000 /= after inquiry into a complaint made by a policy holder (insured) against the insurance company(insurer), is binding on the insurer and the insurer is expected to honour such Award/decision.
Prior to the Insurance Ombudsman Scheme coming into operation, each participating Insurance Institution/company has established and nominated in each of their Institutions a senior and experienced officer designated as the “Complaints Settlement Officer” or “Complaints Resolution Officer” (or similar name).
This is the officer with whom the Insurance Ombudsman liaises with to mediate/settle any disputes/complaints submitted to him by dissatisfied policy holders.
The method by which complaints can be made to the Ombudsman, and the procedure for settlement of disputes etc. is very simple. The procedure has also been publicised and is available in this website.
However, while the Insurance Ombudsman scheme has been set up to ensure its success-we must remember the well-known saying that the proof of the pudding is in the eating. This means that the success of the scheme will only be evidenced by its record of settling/mediating the complaints and disputes submitted to the Ombudsman by policy holders. To this end, there are two main ingredients or conditions.
Firstly, policy holders must have confidence in the independence and integrity of the person who is appointed and functions as the Insurance Ombudsman.
Secondly, the insurance companies that voluntarily set up this scheme and participate in it as members, must show a commitment to ensure the success of the scheme by assisting the Ombudsman in his work and by honouring any Awards/Decisions made by him.
If the above two conditions are met the Insurance Ombudsman scheme in Sri Lanka will be a success.
Initially in January 2005 a Memorandum of Understanding was signed between the IASL and Dr. Wickrema Weerasooria (with the approval of IBSL) for Dr. Weerasooria to function as Sri Lanka’s first Insurance Ombudsman as from 1st February 2005.
Subsequently the IASL decided to incorporate a company called “The Sri Lanka Insurance Ombudsman (Guarantee) Ltd” to operate the Ombudsman scheme. This company is in the process of being incorporated. Once incorporated, the Memorandum and Articles of the company can be inspected/obtained from the Registrar of Companies Sri Lanka. The Ombudsman office also has copies of these documents.
The Ombudsman will be a person appointed by this company whose members will consist of the insurance companies participating in this scheme- who are also all members of IASL and regulated by IBSL. Dr. Weerasooria’s continues to function as the Insurance Ombudsman under this company. The Terms of Reference (Powers) of the Ombudsman and other relevant details about the scheme are found in the Memorandum and Articles of this company.
However, we set out below the more important relevant provisions (taken from the above Memorandum and Articles) which explain the scope of the Ombudsman scheme.
The information given below and in other parts of this website are in our view sufficient for any person wanting to make a complaint to the Ombudsman.
Article (Clause) 43 of the aforementioned Articles sets out the type of complaints that can be inquired into by the Ombudsman. It says:-
Initially, any customer or policy holder of any participating insurance institution can file a complaint to the Ombudsman on any of the following grounds.
1. A complaint on any one of the following grounds alleging deficiency in respect of General Insurance or Long-term Insurance service, may be filed with the Ombudsman
a) Non-settlement or delay in the settlement of a claim
b) Inequitable or unjust interpretation or application of the terms and conditions of the insurance policy with regard to the following:
(i) Claims including maturities of long-term insurance policies
(ii) Premium payable and Premium refunds
(iii) Other benefits payable in terms of the insurance policy
c) Any other relevant matters that may be specified or referred to the Ombudsman by the Insurance Board of Sri Lanka (IBSL) or the Consumer Affairs Authority of Sri Lanka (CAASL).
d) Complaints in respect of charges/fees levied.
e) Complaints by registered/licensed Insurance Brokers against Insurance Companies and vice versa. Also complaints relating to Insurance Agents working for Insurance Institutions. These powers are intended for the good of the insurance industry.
f) Complaints relating to the violation of directives of the Insurance Board of Sri Lanka in relation to insurance services. Complaints directed to the Ombudsman for investigation, settlement and/or report by the Consumer Affairs Authority under the Consumer Affairs Authority Act No. 9 of 2003.
As stated earlier, before a policy holder submits his/her complaint to the Insurance Ombudsman, he/she is expected to have contacted the insurance company (insurer) and attempted to settle the dispute with the insurance company. Only after such attempt or any failure by the insurer to settle the dispute, should a policy holder apply to the Ombudsman for relief. However, the Ombudsman’s office will not reject a complaint only on the ground that the complainant has not attempted to settle the claim with the insurer before coming to the Ombudsman.
Ombudsman Scheme and lawyers.
You do not need the help of lawyers to come before the Ombudsman. All you need do is to set out your complaint in writing as explained earlier.
You are not prohibited from getting a lawyer to draft your complaint but no lawyers are permitted to appear before the Ombudsman. Nor is the Ombudsman bound by legal rules and procedure.
The Ombudsman is supported by a competent staff and also by a Standing Panel Experts on whom he can call for advice if required. The Ombudsman will decide by rules of best practice, insurance law and what is fair and just on the facts of each case and is not be bound to observe any rules of evidence etc.
Ombudsman’s Awards and their Effect:
While the Ombudsman may inquire into any insurance matter or dispute as set out earlier, there is a monetary limit on the amount that the Ombudsman can award to a complainant (policy holder). The current amount is Rs.1,000,000/=. Any award of the Ombudsman upto a sum of Rs.1,000,000/= is binding on the insurer(the insurance company) and they have agreed to honour such awards.
In the case of (i) Awards over Rs.1,000,000/= or (ii) in any matter or dispute involving more than Rs.1,000,000/= where the Ombudsman makes no award but gives his opinion or view – and the insurance company (insurer) or the insured submits the matter in dispute to Arbitration and/or to Litigation, the Ombudsman is entitled to make available to any such Arbitration or to the relevant Court (Judge), a certified copy of his Award or his Written Opinion and his views on the matter. In such a case, the insurance company (the insurer) and/or the insured shall not be entitled to object to such evidence being led at such Arbitration and/or Litigation. By coming before the Ombudsman, the insured and the insurer agree to the admission of such evidence.
The Ombudsman is supported by an administrative staff and a Panel of Experts in different aspects of insurance to whom he can refer and rely on for advice and issues of “best practice” if and when necessary.
The Ombudsman’s period of office is for a term of two years with eligibility for re-appointment.
It is of the utmost importance for the success of this scheme that the Ombudsman’s independence be maintained at all times. The Insurance Association of Sri Lanka (IASL) which is the appointing authority has guaranteed this independence and also provides the Ombudsman with his own budget with full plenary powers to administer his office and his budget without any interference.