Insurance is not a very new and alien concept across the world. The basic purpose of insurance is to provide cover against unforeseen events that can turn the life upside down. With the passage of time the insurance industry and its practices have been evolved to enhance by including options from different business domains as well. Insurance ombudsman is also one of those concepts.
Ombudsman is a common concept from the insurance world, which represents as the middle man between two entities working in different entities. These entities could be the insurance company and an individual, an insurance company and an organization, insurance company and local state, or insurance company and some foreign state. Ombudsman is responsible for assisting both parties on legal terms, without actually representing any particular one. However, usually the ombudsman judgment is highly regarded and accepted. These days ombudsman could also be organizations themselves rather than persons. Presence of ombudsmen is preferred as with them on board question of taking sides or bias does not arise to start with.
In organizations, the role of the ombudsman is to guide and assist employees, organizations or sub groups between employees, or customers and organizations about the rules and regulations about running the business and duties and rights of each other. Usually the ombudsman in organizations like insurance companies is not part of organization chart hierarchy, rather they are more of an adviser reporting directly to upper management, like BOD (Board of Director), Trustee or CEO (Chief Executive Officer). In insurance or any other industries, the ombudsmen are supposed to follow the certain principles and guidelines mentioned to them in IOA (Internal ombudsman Association).
In insurance companies the role ombudsman is very important. Between all the stakeholders of an insurance company like employees, particular set of employees, the company itself, Government, some other organizations and customers, conflict can arise due to anything. For instance, conflict may arise between the insurance company and a customer over the company’s refusal to cover a particular claim, which was through covered in the insurance policy, but the insurance company has found out a violation. Now any party can go to the ombudsman to provide the resolution of the conflict. It is ombudsmen professional and ethical duty to come up with the opinion which is right without putting his or her weights in any particular party’s balance. That is why it is important for the ombudsman to maintain their impartiality so that any party involved could come to them without any hesitation.
Ombudsman is also responsible for remaining proactive for any issue that may arise in the future; even if it is not that much of an issue now or no issue at all. For instance, if a new plan is introduced by the marketing team of the company and ombudsman feel that it may raise the conflict in the future with parties, he must point that out. Furthermore, ombudsman needs to keep an eye on changing insurance laws and regulations to identify any practices that under the new law are not appropriate.
