 bill no 30 of  2015 the insurance (amendment) bill, 2015 byshri sushil kumar singh, mp a billfurther to amend the insurance act, 1938be it enacted by parliament in the sixty-sixth year of the republic of india as follows:—1 (i) this act may be called the insurance (amendment) act, 2015short title and commencement(2) it shall come into force on such date as the central government may, by  notificationin the official gazette, appoint4 of 19385amendment of section 22  in section 2 of the insurance act, 1938 (hereinafter referred to as the principal act),sub-section (7a) shall be re-numbered as sub-section (7b) and  before sub-section (7b) as so re-numbered, the following sub-section shall be inserted, namely:—"(7a) "grievance redressal authority" means the grievance redressal authority established under section 101d"3 after part iva, of the principal act, the following part shall be inserted, namely:—insertion of new part ivb "part  ivb grievance  redressal  mechanism5101d (1) every insurer shall set up an in-house grievance redressal mechanism in such manner, as may be prescribed, for disposal of policy related complaintsin-house grievance redressal mechanism(2) the complaint filed through in-house grievance redressal mechanism shall bedisposed of within a period of thirty days of its receipt10(3) where a complainant is not satisfied with the decision made through in-house grievance redressal mechanism, he may approach the grievance redressal authority for resolution of his dispute within thirty days of the date of such decision101e (1) with effect from such date as the central government may,  by notification in the official gazette, appoint, there shall be established an authority to be known as the grievance redressal authority for redressal of policy related grievancesestablishment of grievance redressal authority15(2) the head office of the authority shall be at such place as the central government may, by notification in the official gazette, specify101f the grievance redressal authority shall consist of—(a) a chairperson, who is, or has been, a judge of a high court; andcomposition of the grievance redressal authority(b) two members, having proven experience and expertise in insurance industry for not less than fifteen years, to be appointed by the central government20101g the chairperson and members of the grievance redressal authority shall hold office for a term of three years from the date of their appointment and shall be eligible for re-appointment:tenure of office of chairperson and members25provided that no person shall hold office as a chairperson or a member, as the case may be, after he has attained the age of sixty-five years101h (1) the central government shall remove from office the, chairperson or any member of the grievance redressal authority, who,—(a) is, or at any time has been, adjudged as an insolvent; orremoval of chairperson or a member of the grievance redressal authority30(b) has become physically or mentally incapable of acting as a chairperson or a member; or(c) has been convicted of any offence which, in the opinion of the central government, involves moral turpitude; or(d) has acquired such financial or other interest as is likely to prejudicially affect his functions; or35(e) has so abused his position as to render his continuation in office detrimental to the public interest (2) the chairperson or a member of the grievance redressal authority shall not be removed under clauses (d) or (e) of sub-section (1) unless he has been given a reasonable opportunity of being heard in the matter40(3) the central government may, by rules, regulate the procedure for the investigation of misbehaviour or incapacity of the chairperson or a member101-i the salaries and allowances payable to and other terms and conditions of service of the chairperson and members of the grievance redressal authority shall be such as may be prescribedsalary and allowances payable to chairperson and members5101j notwithstanding anything in this act or any other law for the time being in force,the grievance redressal authority shall perform the following functions, namely:—functions of the grievance redressal authority(i) resolution of disputes between a policy holder and an insurer in respect of thefollowing matters,—(a) any partial or total repudiation of claims by an insurer including delayin settlement of claims;(b) premium paid or payable in terms of policy;10(c) non-issue of any policy document to policy holder after receipt ofpremium: and(d) legal construction of the policies in so far as such dispute relate toclaim (ii) resolution of disputes between insurer and intermediaries;15(iii) resolution of disputes between the assignees of a policy as to priority ofassignment: and(iv) disposal of complaints on such other matters as the grievance redressalauthority may deem appropriate for the purposes of this act205 of 1908101k the grievance redressal authority shall have, for the purpose of dischargingits functions under this act, the same powers as are vested in a civil court under the code of civil procedure, 1908, while trying a suit, in respect of the following matters, namely:—powers of grievance redressal authority(a) summoning and enforcing the attendance of any person and examining himon oath;25(b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) requisitioning any public record or copy thereof from any office;(e) issuing commissions for examination of witnesses or document; or (f) any other matter which may be prescribed30complaint against insurer101l (1) any person, who has a grievance against an insurer, may himself orthrough his legal heir make a complaint in writing to the grievance redressal authority in such manner as may be prescribed(2) the grievance redressal authority shall dispose of the complaint within a period of ninety days of its receiptappeal35101m any person, aggrieved by the decision of the grievance redressal authority,may, within sixty days from the date of receipt of such decision, prefer an appeal to the high court'' statement  of  objects  and  reasonsto deal with the complaints of the policy holders, the existing system of ombudsman under the redressal of public grievances rules, 1998, has not been found satisfactory the remedy under the consumer protection act, 1986 has also not proved to be effective as a large number of cases are still pending therefore, a grievance redressal authority is required to be established to deal with and resolve the disputes between the insured and the insurer; between the insurer and the intermediaries and between insurer and insurerhence this billnew delhi;sushil kumar singhnovember 25, 2014 financial memorandumclause 2 of the bill provides for establishment of a grievance redressal authority by the central government it also provides for payment of salaries and allowances to the chairperson and members of the grievance redressal authoritythe bill, therefore, if enacted, would involve expenditure from the consolidated fund of india it is estimated that a recurring expenditure of about rupees one hundred crore will be involved per annuma non-recurring expenditure of about rupees fifty crore is also likely to be involved memorandum regarding delegated legislationclause 2 of the bill seeks to insert, inter alia, sections 101d, 101h and 101k in the insurance act, 1938 proposed section 101d  provides for setting up of an in-house grievance redressal mechanism by every insurer in such manner, as may be prescribed proposed section 101h provides that the central government, may, by rules regulate the procedure for investigation of misbehavior or incapacity of the chairperson or a member proposed section 101k provides that the grievance redressal authority, for the purpose of discharging its functions, shall have the same powers as are vested in the civil court in respect of matters like summoning and enforcing of attendance of any person, etc and such other matters as may be prescribed by rules made under the insurance act, 1938the matters in respect of which rules may be made are generally matters of administrative detail and procedure and it is not possible to provide for them in the bill itself the delegation of legislative power is, therefore, of a normal character annexure extract from the insurance act, 1938no 4 of  1938    definitions2 in this act, unless there is anything repugnant in the subject or context—(1) "actuary" means an actuary possessing such qualifications as may be specified by the regulations made by the authority;    (7a) "indian insurance company" means any insurer being a company,—(a) which is formed and registered under the companies act, 1956 (1 of1956);(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed twenty-six per cent paid-up equity capital of such indian insurance company;(c) whose sole purpose is to carry on life insurance business or general insurance business or re-insurance businessexplanation—for the purpose of this clause, the expression "foreign company"shall have the meaning assigned to it under clause (23a) of section 2 of the income-tax act, 1961 (43 of 1961);     ———— a billfurther to amend the insurance act, 1938————(shri sushil kumar singh, mp)