The Insurance Regulatory and Development Authority of India (IRDAI) has issued a strong directive to insurance companies, urging them to overhaul how they handle customer grievances at a time when policyholders across the country are expressing growing frustration over delays, confusing procedures and unfair claim denials.
At a high-level meeting held on November 26 with Chief Compliance Officers (CCOs) and Grievance Redressal Officers (GROs), IRDAI Chairman Ajay Seth emphasized that insurers must adopt a deeper cultural shift centred on transparency, empathy and accountability.
‘Compliance is a Mind-set, Not a Department’
Delivering a pointed message, Seth said:
“Compliance cannot be a department, it must be a mind-set. And grievance redressal cannot be the end of a process—it must be our early warning system. When in doubt, choose the customer.”
He stressed that customer-first thinking is vital for restoring trust in the insurance industry, strengthening credibility and ensuring sustainable growth.
Policyholders Struggling, IRDAI Steps In
Over recent months, numerous policyholders have reported being stuck in slow and opaque claims processes, often bounced between insurers, third-party administrators (TPAs) and grievance desks.
Issues highlighted include:
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Delayed claim settlements
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Complaints misclassified as service requests
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Technical or unclear reasons for rejection
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Lack of communication and transparency
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Increasing dependence on Ombudsmen for final redressal
IRDAI’s latest push signals a more assertive approach aimed at addressing these widespread concerns.
Rising Complaints Trigger Regulatory Alarm
The regulator expressed concern over the rising number of complaints being filed directly with insurers and escalated to Ombudsmen.
Insurers were instructed to:
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Improve the speed and quality of grievance resolution
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Standardise definitions of service requests vs complaints
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Strengthen internal monitoring systems
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Ensure strict adherence to regulatory timelines
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Review compliance mechanisms more frequently
Ajay Seth described CCOs and GROs as the “conscience and credibility” of insurance companies, underscoring their responsibility to protect policyholder interests.
A Shift Toward Customer-Centric Insurance
The meeting, held on Constitution Day, also highlighted values of justice, equality and liberty—principles Seth said must translate into how insurers treat their customers.
By positioning grievance handling as an early-warning tool rather than a final step, IRDAI aims to push insurers toward more transparent, fair and accessible systems at a time when public trust is at stake.
The regulator’s firm stance is expected to drive a more customer-centric culture across the insurance sector.
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