Karnataka Court: Fair Fight for Insurance Claimants

The Karnataka High Court has affirmed that insurance complainants are entitled to legal representation as cases progress beyond mediation. Justice Sachin Shankar Magadum ruled in April 2026 that the insurance ombudsman cannot deny a complainant the right to engage an advocate once proceedings enter the adjudicatory phase under Rule 17 of the Insurance Ombudsman Rules, 2017. This decision addresses concerns about the complexity of insurance claims, where policyholders often lack the resources to effectively represent themselves against insurers with dedicated legal teams.

The ruling comes amidst a strain on the insurance ombudsman system, with a significant increase in complaints received by offices across India. The complexity of issues like rejected health insurance claims due to pre-existing conditions or misselling disputes requires technical knowledge that the average policyholder may not possess. The court's verdict seeks to rectify this imbalance by ensuring that representation is available during the merits-based examination of a case, without altering the informal nature of the initial mediation stage.

While acknowledging concerns about potential procedural inflation, the court's decision implicitly rejects the idea that policyholders seeking assistance are exploiting the system. Safeguards can be implemented to manage hearings effectively. The aim is to establish a structured framework that allows for genuine assistance, preserving the ombudsman system's core character as an accessible and free consumer protection mechanism. This ensures that genuine grievances receive a fair hearing, thereby bolstering consumer trust in the insurance sector.