Insurance and the law: India
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Deficiency in service
Insurance co. liable for deficiency in service
From the archives of The Times of India 2010
‘Insurance co liable for deficiency in service’
Shibu Thomas | TNN
Mumbai: In the midst of intense war between hospitals and medical insurance companies over health insurance reimbursements, there is some good news for patients. Central Mumbai District Consumer Disputes Redressal Forum, in a landmark order, has held that an insurance company is liable for deficiency in service if it fails to reimburse hospitalisation costs of a patient who has a Mediclaim policy with it.
The forum ordered Oriental Insurance Company and Raksha TPA to pay Rs 64,223 to an Andheri-based couple Ketan (47) and Bhakti Desai (40); the amount was deducted by the insurer from the hospitalisation reimbursement on the ground that ‘‘it was too high’’.
The bench comprising president S P Mahajan and members, J S Iyer and S S Patil, also asked the insurance firm to shell out Rs 10,000 to the couple as damages for causing mental agony and legal costs.
The insurance company paid up the amount earlier this month following execution proceedings initiated by the couple.
‘‘The company’s attitude was outrageous,’’ Ketan told TOI. ‘‘I had a Mediclaim policy with the company for over 10 years and was very regular in renewing the policy annually and paying the premiums. I only claimed the amount that was applicable and so it was a shock when the firm deducted the amount. Once the insurance company approves the hospital bill, how can it say it won’t pay?’’ he asked.
The Desais had a joint mediclaim policy with Oriental for Rs 5 lakh. Bhakti underwent a surgery for ‘‘gall bladder calculus with pancreatitis’’ at Lilavati Hospital in December 2007.
Following her discharge, they submitted the hospital’s bill of Rs 3.94 lakh to the insurance company for reimbursement. Oriental, however, paid them only Rs 3.29 lakh. It said it had deducted Rs 64,223 on the ground that the fees charged by the surgeon, the anaesthetist and the operation theatre bill were too high.
The insurance company also deducted Rs 293 charged for cologne, blade and a warm blanket.
Premium
Non-payment can get claim rejected: SC
Nov 2, 2021: The Times of India
An insurance claim can be rejected if the policy has lapsed on account of non-payment of premium, said the Supreme Court. It also stressed that the terms of an insurance policy have to be strictly interpreted.
The apex court observation came while setting aside an order of the National Consumer Disputes Redressal Commission (NCDRC) that ordered additional compensation in a road accident case. A bench of Justices Sanjiv Khanna and Bela M Trivedi said it is a well-settled legal position that in a contract of insurance there is a requirement of Uberrima fides, ie good faith on the part of the insured.
“It is clear that the terms of insurance policy have to be strictly construed, and it is not permissible to rewrite the contract while interpreting the terms of the policy,” the bench said.
The SC was hearing an appeal filed by the Life Insurance Corporation (LIC) against the judgement of the NCDRC that had set aside the order passed by the state commission.
In the case, the woman’s husband had taken a life insurance policy under the Jeevan Suraksha Yojana from LIC under which a sum of Rs. 3.7 lakh was assured by the company. Besides this amount, in case of death by accident an additional sum of Rs. 3.7 lakh was also assured.
The insurance premium of the said policy was to be paid sixmonthly. However, there was a default in payment. On March 6, 2012, the husband of the complainant met with an accident and succumbed to injuries on March 21, 2012. After the death of her husband, the complainant filed a claim before LIC and was paid a sum of Rs. 3.7 lakh. However, the additional sum of Rs. 3.7 lakh towards the accident claim benefit was denied.
“In the instant case, the policy had lapsed on October 14, 2011, and was not in force on the date of accident, ie on March 6, 2012. It was sought to be revived on March 9, 2012, after the accident in question, and that too without disclosing the fact of the accident which had taken place on March 6, 2012,” the SC said. The top court said the claim for extra accident benefit was rightly rejected by the corporation. PTI
See also
Insurance, life and general: India
Insurance and the law: India
