In a recent decision, the Kerala High Court declared that the insurance ombudsman cannot mandate an insurance company to renew a policy at a specific premium rate.
A Division Bench comprising Justices A Muhammed Mustaque and Shoha Annamma Eapen clarified that under Rule 17 of the Insurance Ombudsman Rules, 2017, the ombudsman’s authority is limited to awarding compensation to complainants. The Court emphasized, “Nowhere in the Rules it is stated that the Insurance Ombudsman has power to issue directions to the insurer to issue a policy at a specified premium.”
This ruling came while dismissing an appeal by NS Gopakumar, who had a medi-claim policy with Oriental Insurance Company. Initially, Gopakumar’s annual premium was ₹7,172. However, in 2018, upon seeking renewal, he was notified of an increased premium of ₹19,587. Disputing this hike, Gopakumar approached the insurance ombudsman, who initially dismissed his complaint but later directed the insurer to renew the policy at the original rate following High Court orders.
The insurance company challenged this directive, leading to a High Court single judge ruling in their favor. Gopakumar’s review petition against this decision was also dismissed. Subsequently, he appealed to the Division Bench.
The Bench noted that while Rule 13 empowers the ombudsman to hear complaints regarding premium payments, it does not grant authority to dictate policy renewal terms. Therefore, the Court upheld the single judge’s decision, stating, “Ext.P8 award passed by the Insurance Ombudsman is found to have exceeded the jurisdiction and it is unsustainable in law.”
The appeal was dismissed, with advocates K Shrihari Rao and N Shobha representing the appellant, and standing counsel KS Santhi appearing for Oriental Insurance Company Ltd.
