Insurance Grievances as a Governance Challenge: Evaluating IRDAI’s Ethical Responsibility in the Indian Insurance Market

Abstract

The rapid expansion of the insurance sector in India, encompassing both life and non-life segments, has significantly enhanced financial protection and risk mitigation for households and enterprises. However, this growth has been accompanied by a persistent rise in insurance-related grievances, raising critical concerns about ethical conduct, regulatory effectiveness, and governance standards within the insurance ecosystem. Insurance grievances—ranging from mis-selling and inadequate disclosure to claim repudiation and delays in settlement—reflect deeper structural and behavioural challenges that undermine consumer trust and market credibility. This paper examines insurance grievances in India as a governance challenge, with specific emphasis on evaluating the ethical responsibility of the Insurance Regulatory and Development Authority of India (IRDAI). Using secondary data drawn from IRDAI annual reports, Insurance Ombudsman statistics, and relevant policy documents, the study analyses the nature, determinants, and consequences of grievances across life and non-life insurance markets. The paper adopts a normative governance framework to assess IRDAI’s grievance redressal mechanisms, including the Integrated Grievance Management System (IGMS) and the Ombudsman framework, in terms of accessibility, transparency, timeliness, and fairness. The findings suggest that while IRDAI has made notable institutional efforts to strengthen consumer protection, persistent issues such as information asymmetry, intermediary misconduct, product complexity, and uneven grievance resolution outcomes continue to challenge ethical regulatory governance. The paper argues that effective grievance redressal is not merely an administrative function but a core ethical obligation of insurance regulation. It concludes by proposing policy measures aimed at enhancing ethical accountability, consumer-centric governance, and trust in India’s insurance regulatory framework.