IRDA is established with a mission to promote orderly growth and protect the interests of the policyholders. In spite of formulating various regulations and guidelines, due to conflicting nature of interests of the parties, a number of disputes arise and the policyholders suffer. IRDA has directed the insurance companies to have an effective grievance settlement mechanism and also establish a grievance cell at its office. A number of other alternative measures are available to the policyholder. But, other avenues are cumbersome, time-consuming and expensive. In the present emerging free and competitive market scenario, insurance companies should devise a strong mechanism to handle the grievances of consumers with an appellate authority to IRDA.

The Insurance Regulatory and Development Authority (IRDA) is established with a mission"to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto." Its objective is to facilitate the orderly growth of the insurance industry. In order to attain the objectives, the IRDA is empowered to make rules and regulations and issue directions for effective administration of insurance product and services. The original rules are amended to provide further protection to the insurance policyholders. The rules are more comprehensive and cover various parameters required for the protection of interests of the insurance policyholders.

Even after having the provisions to protect the interests of the policyholders, who are considered as the focus area of the insurance business, they suffer a number of problems during the claims settlements. The reason is the conflict in interests of the parties. The insurers always want to be conservative and stringent while settling the claims by strictly adhering to the rules and conditions stated in the policy which are not clearly understood by the policyholder at the time of purchasing the policy. As a result, the claims are not settled to the satisfaction of the parties and discontent is developed.

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