The National Law Commission of India in its consultation paper on Insurance Act 1938 has recommended constitution of a grievance redressal mechanism based on the Securities Exchange Board of India model with modifications and additions.
Sebi which functions as a regulator of the stock markets also has powers to levy penalties and provide adjudication for contravention or failure to follow the regulations.
Penalties are adjudicated by adjudicating officers, who are appointed from amongst the officers of Sebi not below the rank of a division chief.
These officers can hold an inquiry and after providing for reasonable opportunity of being heard, impose a penalty.
In line with the Sebi model, the law Commission has proposed establishment of a three -member Grievance Redressal Authority in major cities where complaints of policy holders and consumers against the insurers will be heard.
The GRA like Sebi, will be presided over a by a sitting or a retired district judge and in addition will consist of two members who have expertise in the field of insurance.
Further, on similar lines as the Sebi Act, the Commission proposed for adjudication in matters involving contravention of the Act, Rules and Regulations made by the IRDA.
The Commission also proposed that penalties be levied after an adjudication or inquiry by adjudicating officers on the pattern of the Sebi Act.
These adjudicating officers will be appointed from amongst the officers of the IRDA above a certain level like the Adjudicating Officers of the Sebi.
Just as Sebi orders can be challenged at the Securities Appellate Tribunal, orders of GRAs can also be appealed at the Insurance Appellate Tribunal.
SAT is presided by a sitting or a retired Judge of the Supreme Court or a sitting or a retired Chief Justice of a high court.
Other members of SAT are persons with expertise in securities market and have qualifications and experience in legal and corporate fields.
