Dis- allowance in Mediclaims

HIGH COURT OF JUDICATURE OF ALLAHABAD Reserved Civil Misc. Writ Petition No.61244 of 2005 Umesh Narain Sharma v. The New India Assurance Co. Ltd. and others Hon'ble R.K.Agrawal, J. Hon'ble Vikram Nath, J. (Delivered by R.K.Agrawal, J.) By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, Sri Umesh Narain Sharma, seeks the following reliefs:- "(i) issue a writ, order or direction in the nature of certiorari quashing the order dated 13.6.2005 issued by the respondent no.2 (Annexure ''1'to the writ petition); (ii) issue a writ, order or direction in the nature of mandamus commanding upon the respondents to pay the claim of Rs.3.31 lacs to the petitioner in respect of the expenses incurred in the treatment of the petitioner; (iii) issue any other suitable writ, order or direction which this Hon'ble Court may deem fit and proper and to which the petitioner may be found entitled to in the facts and circumstances of the case; (iv) award costs of this petition to the petitioner." Briefly stated, the facts giving rise to the present petition are as follow:- The petitioner is a Senior Advocate of this Court. He had taken a mediclaim insurance policy from the New India Assurance Company Limited, Allahabad, respondent no.3, which is a subsidiary of the General Insurance Corporation of India. It is a Government Company wholly managed and controlled by the Government of India. According to the petitioner, he was insured by the respondent no.1 for the first time on 24.11.1998. It was renewed from time to time and except for some break in renewal during the year 1999 and 2000, the mediclaim insurance policy had been in force continuously for the last 5 years since 30.1.2001. The particulars of the policy, period of insurance and also the claim, if any, preferred by the petitioner is given below:- Policy no. Period of Insurance Claim made 4208014807021 24.11.1998 to 23.11.1999 NIL 4208014807955 17.01.2000 to 16.01.2001 NIL 4208014808652 30.01.2001 to 29.01.2002 NIL 4208014809832 30.01.2002 to 29.01.2003 NIL 4208014800509 30.01.2003 to 29.01.2004 NIL 4208014800915 30.01.2004 to 29.01.2005 NIL 4208014875129 30.01.2005 to 29.01.2006 Claim in question The mediclaim insurance policy taken by the petitioner was for a sum of Rs.2/- lacs. According to the petitioner, while getting himself insured, he had disclosed all material facts as required by the Insurance Company, including the details of his health condition and at the time of taking the mediclaim insurance policy on 24.11.1998, he did not suffer from any ailments or heart disease nor did he had any symptom of any cardiac problem. In the first week of March, 2005, the petitioner had some complaint regarding his health and on medical advice, he got himself checked up and was admitted on 18.3.2005 at Kailash Heart Institute, H-33, Sector-27, NOIDA for treatment of heart disease under Dr. D.S.Gambhir, M.D., D.H., F.A.M.S. The petitioner underwent angiography in which it was found that there was blockade in the arteries. The petitioner was advised for angioplasty which he underwent and was discharged from the hospital on 22.3.2005. The petitioner made a claim for reimbursement of the medical expenses for a sum of Rs.3.31 lacs which he had incurred on account of treatment of his disease and hospitalisation, by submitting the claim form dated 23.3.2005. The respondent no.1 verified the claim and vide letter dated 13.6.2005 rejected the claim on the following grounds:- "It is noted from the insurance certificate that there was a break in policy while renewal in 2001. The patient is a known case of CAD since 2005 (5 years). Hence the disease is preexisting and the claim is not payable." The rejection of the claim is under challenge in the present writ petition on the ground that the stand taken by the Insurance Company is arbitrary; that the petitioner had been insured with the respondent no.1 with effect from 24.11.1998 and since then the mediclaim insurance policy is continuing; the break in the continuity of the policy for 13 days, i.e., from 17.1.2001 to 29.1.2001 would have no material bearing and as the Insurance Company had continued to renew the policy on year to year basis on the same terms and conditions for the last more than 5 years; it is not open for it to refuse to honour the claim on the ground that the disease was preexisting or that there was break in the renewal of the policy; in any event, the petitioner did not have any cardiac problem in the year 2000 and the rejection of the claim is based on wholly irrelevant material and consideration and the invocation of clause 4.1 of the mediclaim insurance policy is wholly arbitrary. In the counter affidavit affirmed by Shailendra Shukla, Deputy Manager, Legal, on behalf of the Insurance Company, it has been stated that the petitioner has not revealed his health condition on 30.4.2001 (the date appears to have been wrongly mentioned as 30.4.2001 whereas it is 30.1.2001 when the fresh policy was issued) when the policy had expired on 16.1.2001 and a fresh policy was issued on 30.1.2001. The policy issued on 30.1.2001 is actually a fresh policy with fresh proposal form and the petitioner had declared that there was no preexisting complaint regarding his health. The condition of clause 4.1 of the policy has rightly been invoked. In the rejoinder affidavit filed by the petitioner it has been stated that the break in the policy has no bearing on the merits of the case as he had made the claim against the policy for the period 31.1.2005 to 29.1.2006 and 14 days break between the policy of 2000-2001 has no bearing. It has been reiterated that the petitioner was not a known patient of CAD. According to the petitioner, clause 4.1 of the policy cannot be enlarged and interpreted in such a wide manner so as to preclude the policy holder from the claim and from a conjoint reading of clauses 3 and 4.1, it would be abundantly clear that any disease or illness that relapses within 45 days from the last consultation/treatment would be treated to be the same illness. However, if it relapses after lapse of 45 days, it would be considered to be a fresh illness. The claim made by the petitioner is for the policy of 2005-06 whereas the petitioner is having the policy since 1998-99 and during the said period, there is no instance of any disease or illness that relapsed after 45 days for which the petitioner was treated in the year 2005-06. On the contrary, the disease was not preexisting. The interpretation being adopted by the Insurance Company is totally against the public policy and is violative of Section 23 of the Contract Act as the standard form of the agreement has been imposed by the Insurance Company and the petitioner had to sign on the dotted lines and was not permitted to bargain the terms and conditions. If such an interpretation as made by the Insurance Company is accepted, it would result in payment of no claim in any condition. We have heard Sri Sumit Kumar, learned counsel for the petitioner, and Sri A.B.Saran, learned senior counsel, assisted by Sri Parmatma Rai, Advocate, appearing for the respondents. Sri Sumit Kumar, learned counsel for the petitioner, submitted that the petitioner had no preexisting cardiac problem during the year 2001 or before and, therefore, the insurance claim made by the petitioner was fully justified. According to him, clause 4.1 of the terms and conditions of the mediclaim insurance policy cannot be invoked in the present case and the Insurance Company ought to have reimbursed the expenses incurred by the petitioner in treatment of his cardiac disease and hospitalisation. Sri A.B.Saran, learned senior counsel, on the other hand, submitted that as the mediclaim insurance policy taken by the petitioner on 17.1.2000had lapsed on 17.1.2001 and was not renewed before its expiry or on its expiry on 16.1.2001 and instead a fresh insurance policy was taken on 30.1.2001, the Insurance Company was perfectly justified in rejecting the claim on the ground that the petitioner is a known case of CAD since 2000 (5 years). Clause 4.1 of the terms and conditions of the mediclaim insurance policy had rightly been invoked. We have given our anxious consideration to the various pleas raised by the learned counsel for the parties. The fact except as to whether the petitioner was a known case of CAD since 2000 (5 years) are not in dispute. The petitioner had continuously taken the mediclaim insurance policy since 24.11.1998 with a short break from 24.11.1999 to 16.1.2000 and 17.1.2001 to 29.1.2001. He was hospitalised in Kailash Heart Institute, NOIDA on 18.3.2005 and had undergone angioplasty. The insurance claim has been rejected by the respondent no.1 on the ground that there was a break in the policy in renewal in 2001 and the patient is a known case of CAD (5 years) hence the disease was preexisting and the claim was not payable. In the case of Life Insurance Corporation of India and others v. Asha Goel (Smt.) and another, (2001) 2 SCC 160, the Apex Court has held as follows:- "10. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in no case the High Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy. It is neither possible nor proper to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. The determination of the question depends on consideration of several factors, like, whether a writ petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues; the nature of the dispute raised; the nature of inquiry necessary for determination of the dispute etc. The matter is to be considered in the facts and circumstances of each case. While the jurisdiction of the High Court to entertain a writ petition under Article 226 of the Constitution cannot be denied altogether, Court must bear in mind the self-imposed restriction consistently followed by High Courts all these years after the constitutional power came into existence in not entertaining writ petitions filed for enforcement of purely contractual rights and obligations which involve disputed questions of facts. The Courts have consistently taken the view that in a case where for determination of the dispute raised it is necessary to inquire into facts for determination of which it may become necessary to record oral evidence a proceeding under Article 226 of the Constitution is not appropriate forum. The position is also well settled that if the contract entered between the parties provide an alternate forum for resolution of disputes arising from the contract, then the parties should approach the forum agreed by them and the High Court in writ jurisdiction should not permit them to by-pass the agreed forum of dispute resolution. At the cost of repetition it may be stated that in the above discussions we have only indicated some of the circumstances in which the High Court have declined to entertain petitions filed under Article 226 of the Constitution for enforcement of contractual rights and obligation; the discussions are not intended to be exhaustive. This Court from time to time disapproved of a High Court entertaining a petition under Article 226 of the Constitution in matter of enforcement of contractual rights and obligation particularly where the claim by one party is contested by the other and adjudication of the dispute requires inquiry into facts. We may notice a few such cases; Mohammed Hanif v. State of Assam, (1969) 2 SCC 782; Banchhanidhi Rath v. State of Orissa, (1972) 4 SCC 781 : (AIR 1972 SC 843 : 1972 Lab IC 431); Smt. Rukmanibai Gupta v. Collector, Jabalpur, (1980) 4 SCC 556 : (AIR 1981 SC 479), Food Corporation of India v. Jagannath Dutta, 1993 Supp (3) SCC 635 : (1993 AIR SCW 1425 : AIR 1993 SC 1494) and State of H. P. v. Raja Mahendra Pal, (1999) 4 SCC 43 : (1999 AIR SCW 1376 : AIR 1999 SC 1786). 11. The position that emerges from the discussions in the decided cases is that ordinarily the High Court should not entertain a writ petition filed under Article 226 of the Constitution for mere enforcement of a claim under a contract of insurance. Where an insurer has repudiated the claim, in case such a writ petition is filed the High Court has to consider the facts and circumstances of the case, the nature of the dispute raised and the nature of the inquiry necessary to be made for determination of the questions raised and other relevant factors before taking a decision whether it should entertain the writ petition or reject it as not maintainable. It has also to be kept in mind that in case an insured or nominee of the deceased insured is refused relief merely on the ground that the claim relates to contractual rights and obligations and he/she is driven to a long drawn litigation in the civil Court it will cause serious prejudice to the claimant/other beneficiaries of the policy. The pros and cons of the matter in the context of the fact situation of the case should be carefully weighed and appropriate decision should be taken. In a case where claim by an insured or a nominee is repudiated raising a serious dispute and the Court finds the dispute to be a bona fide one which requires oral and documentary evidence for its determination then the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima facie to have merit and oral and documentary evidence may become necessary for determination of the issue raised then a writ petition is not an appropriate remedy." In the case of Biman Krishna Bose v. United India Insurance Co. Ltd. and another, (2001) 6 SCC 477, the Apex Court has held as follows:- "Where an insurance company under the provisions of the Act having assumed monopoly in the business of general insurance in the country and thus acquired the trappings of the State being other authorities under Article 12 of the Constitution, it requires to satisfy the requirement of reasonableness and fairness while dealing with the customers. Even, in an area of contractual relations, the State and its instrumentalities are enjoined with the obligations to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving to a decision. Arbitrariness should not appear in their actions or decisions." It has further held as follows:- "A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy." In the case of United India Insurance Co. Ltd. v. Pushpalaya Printers, (2004) 3 SCC 694, has held as follows:- "It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression "impact", even otherwise applying the rule of contra proferentem, the use of the word "impact" in Clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and Clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. v. Chandmull Jain and another, AIR 1966 SC 1644 has expressed that ( AIR p.1649, para 11) "in a contract of insurance, there is requirement of uberrima fides, i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem i.e. against the company in case of ambiguity or doubt." Applying the principles laid down in the aforesaid cases to the facts of the present case, we find that the present is not a case simpliciter for enforcing the contractual right but challenges the arbitrary action of the Insurance Company which is covered under Article 12 of the Constitution of India, in rejecting the claim of the petitioner on wholly untenable grounds and, therefore, this Court can examine the correctness of the order dated 13.6.2005 passed by the Insurance Company. Clause 4.1 of the terms and conditions of the insurance policy reads as under:- "4. Exclusions. .... .... 4.1 Such diseases which have been in existence at the time of proposing this insurance pre-existing condition means any injury which existed prior to the effective date of this insurance. Pre-existing conditions also means any sickness or its symptoms which existed prior to the insured person had knowledge that the symptoms were relating to the sickness. Complications arising from pre-existing disease will be considered part of that pre-existing condition." From a reading of the aforesaid clause, we find that it will apply to such diseases which were in existence at the time of proposing the insurance policy, i.e., prior to the effective date of the insurance. It is the own case of the respondents that when the fresh policy was issued on 30.1.2001, being Policy No.48/8652 in the proposal form the petitioner had declared that there was no preexisting complaint regarding his health vide paragraph 7 of the counter affidavit filed by Shailendra Shukla, Deputy Manager, Legal. It is presumed that the respondents had checked and verified all the informations given in the proposal form by the petitioner before issuing the mediclaim insurance policy. Thus, it is not right to say that the petitioner is a known case of CAD since 2000. In the counter affidavit except for a bald statement that the petitioner is a known case of CAD since 2000, neither any document nor any material has been brought on record to establish the said averments. In view of the specific averments made in paragraph 7 of the counter affidavit filed by Shailendra Shukla on behalf of the respondents, the stand taken by the respondents for rejecting the claim cannot be sustained. In view of the foregoing discussions, the writ petition succeeds and is allowed with costs which we assess at Rs.5,000/-. The order dated 13.6.2005 is quashed. The respondent no.3 is directed to process the claim of insurance and make payment of the amount which is ultimately found due and payable, to the petitioner within one month from the date a certified copy of this order is filed before the respondent no.3 27.11.2006 vkp xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 1-Balwinder Singh Vs The New India Assurance Company Limited Case: The wife of Balwinder Singh was involved in an accident and was admitted in Max Hospital, New Delhi. The death occurred and a claim was lodged with New India Assurance Company Limited towards payment of hospital claim bill (Mediclaim). Balwinder Singh was unable to submit original bills and he explained that original hospital bills are with Motor Vehicle Tribunals. The claim was rejected by Deepak Verma, deputy manager (operations) an official of New India Assurance Company Limited. Singh filed a complaint with the consumer forum alleging that the insurance company did not settle the Rs 1 lakh claim after he filed the requisite documents (photo copies) regarding the hospitalization of his wife. This was rebutted by the New India Insurance Company on grounds that the complainant "never provided the hospital bills in original and they only submitted duplicate copies of the bills." It termed the denial of claim on basis of non-submission of documents and denied the remaining allegations. Judgment: The District consumer Disputes Redressal Forum (East) has asked the New India Assurance Company to pay Rs. 1 Lakh claim to its client. The forum also ordered a compensation of Rs. 40,000 to be paid by Deepak Verma deputy manager of the company. The Judgement said: 1. Directing an insurance company to compensate its client, a district consumer forum has slammed insurance firms for rejecting claims “on one pretext or the other.” 2. "The officer responsible for not acting judiciously and as per the rules need to be made personally liable and not the corporation. They are the custodian of the public money," said the order passed by president of forum N A Zaidi and member T Vijayan. 3. "They cannot be allowed to burden the public money with interest which the company has to pay," the order further stated. Thus Deepak Verma, deputy manager (operations) in his personal capacity has been asked to compensate the client Balwinder Singh. These points were noted by the bench which termed it as "unfair trade practice" by the company. It also remarked that they did not understand "how can the opposite party file this claim as no claim when it was within their knowledge that the original documents are on the file of the Motor Accidents Claims Tribunals (MACT) to which they were a party." Implication: Persons working in claim departments of PSU’s will have to be careful with a new to avoid payment of penalty out of service. 2-Life Insurance Corporation of India Vs Haryana Consumer Disputes Commission Case: There was undue delay in passing claim by LIC and the consumer had gone to Haryana Consumer Disputes Commission. Their Judgement was that claim be paid and concerned official should pay penalty out of his own pocket. LIC decided to take the case to National Consumer Disputes Redressal Commission in the form of revision petition. Their stand was that LIC is ready to pay penalty as a corporation/company and officer should not be compelled to pay out of his own salary/ pocket. Judgment: National Consumer Disputes Redressal Commission disposed the petition and maintained that officer of LIC should pay penalty out of his own pocket. The Commission observed that there was ‘dereliction of duty’ by the LIC officers and instead of tackling the problem; it had challenged the state commission’s order. Implication: You will be surprised to know that policy was for Rs. 1 Lakh only and case has been going on since 2004. It is a landmark Judgement and will be welcomed by consumers located all over the country. It will discoverage officials in claims department of Life/ Non Life/ Health Insurance Companies to go on rejecting claims. 3-Refusal to renew a policy amounts to unfair practice In this case Biman Bose vs. United India Insurance Company the insurer had refused to renew mediclaim policy of Biman Bose and his wife Alka Bose . The plea of Biman Bose was that he was being victimised because of the case he had slapped on the insurer. The judgement of the Supreme Court was that the refusal to renew the policy was arbitrary and unfair. Company was fined and asked to reinstate policy. This case answers questions or fear of many customers who feel –Will it be that in the event of a claim the insurance company will refuse to renew the policy. 4-Insurer shouldn’t take over 6 months to settle claim In this case Kunti Devi had complained to IRDA that HDFC Standard Life had not settled claim even after 12 months. The stand of the company was that it was investigating the cause of death and will take some more time. IRDA ruled that investigation should not take more than 6 months from the date of claim. Insurer was fined Rs 5 lakhs. With such cases we get the confidence that insurance companies will move towards settlement of the case within a reasonable time. 5-Shiv Kumar Gupta vs New India Assurance Co. Ltd. A district consumer forum has ordered New India Assurance Co. Ltd. in May 2012 to pay a policy-holder Rs.60,000 for refusing to reimburse expenses incurred on hospitalization. Shiv Kumar Gupta had spent Rs.45,252 on his son’s hospital stay in 2010. The district consumer disputes redressal forum has ordered the company to reimburse the amount and also pay Rs.10,000 as compensation for “harassment’ and “mental agony” and Rs.5,000 as litigation cost. The insurance company refused to pay claiming Gupta had not provided all documents. Gupta informed the third party administrator of the company of his son’s hospitalization on December 7, 2010 and submitted documents. He was told his claim was being processed. The company later rejected it arguing that doctor’s prescription slip and IPD paper were missing. “Despite the fact that the insurance company has received the policy premium when the benefits were required to be extended to the complaint / family members it closed the claim without valid reason,” said the forum. 6-Insurance co challenged only quantum of relief The Supreme Court in August 2011 rejected National Insurance Company’s appeal against the high court order that awarded compensation to a woman who lost her unborn child in an accident with a state transport bus. The bench at the time of entertaining the appeal had found the question can a fetus be considered a child for the purpose of compensation. It realized that the insurance company had not questioned the correctness of the award made by the tribunal, determining the amount of compensation towards the loss of unborn child. It had only challenged the quantum. The appellant company is now stopped from contending that an unborn child cannot be considered to be a child for the purpose of claiming compensation under Section 166 of the MV Act. Justice Jain, writing the judgment said. It is manifest from the judgment under challenge that the question for consideration before the HC in the claimant’s appeal was with regard to the quantum of compensation and not entitlement of claim for grievous injury to a 30-week-old child in uterus resulting in the birth of a stillborn child, the SC said, upholding award of Rs.1.80 Lakh to the woman. 7-The Hindustan Times Chandigarh dt 31st march'2010 .carried the details of the case; Mr. Ahuja is having Health Insurance from Royal Sundaram. He was diagnosed with CAD angina, for which he had to undergo Coronary Angiography and Angioplasty, which was informed to company with proper procedure. But company rejected the claim on the ground that complainant was known case of Hypertension since 2000. On explanation by the customer company replied that the complainant concealed the fact that he suffered from Heart disease along with Hypertension since the year 2000, which is specifically excluded under policy terms. Consumer Forum judgment: It cannot be said if the complainant was suffering from Hypertension nor can it be said that he concealed the disease at the time of purchasing the policy.” Needless to mention that CAD is totally different disease than hypertension. The claim for CAD therefore cannot be repudiated on the ground that the complainant was suffering from Hypertension. We appreciate this judgment as it has been customary for the insurance companies to reject the claim on the basis by taking the lea of hypertension. Case Study - 2 Deficiency in Service Mr. Devinderpal Singh, a resident of Jamalpur, had taken a Mediclaim policy from the company for his 10-year-old son Raja. He was insured for Rs 20,000 for the period from October 13, 1998 to October 12, 1999. The complainant stated before the forum that in the first week of November, 1998, his son, felt severe pain in his abdomen. After the medical examination, a stone was found in his kidney. Thereafter, Raja was taken to the Sidhu Hospital for the treatment and there he underwent treatment in November 1998. The complainant stated that he had spent huge amount on his treatment but could not preserve all the bills and submitted the bills for Rs 18,500. The company pleaded that the said policy was obtained after concealment of the precious disease as the disease was pre-existing at the time of taking the policy as such the claim was not payable. The company further stated that Dr Tarsem Lal Gupta who was referred the case for the medical opinion, said Raja was suffering from pre-existing disease at the time of taking the insurance policy and as the claim fell within the exclusion clause No. 401 of the policy. The company maintained that the claim was rightly repudiated. The forum observed, "It appears as if the father of Raja had knowledge of the disease and as such he took the policy to meet the expenses of the treatment. The forum stated that the disease was pre-existing and was not covered under the policy. The forum further added that the company had intimated the complainant that the claim lodged was considered as 'no claim' as per the rules of the policy. The forum held that there was a clear deficiency on the part of the company for not intimating the complainant. CDRF asks OIC to make full payment of Mediclaim Case Study - 3 The Consumer Disputes Redressal Forum recently ordered the Oriental Insurance Company to pay Rs 39,927 as Mediclaim insurance to Mr. Piyush Patel, including eight per cent interest from August 19, 1997, till realization. In this case Mr. U.M. Raval of CDRF observed that non-disclosure of Mr. Patel's medical history like epilepsy, hypertension and backache would not amount to suppression of material facts. The OIC had repudiated the claim of reimbursement on the grounds that disease had pre-existed and the insured had concealed material facts in the proposal form itself. Policyholder jointly filed the complaint Mr. Piyush Patel and city-based Consumer Education and Research Center for non-reimbursement of hospital expenses. On June 7, Mr. Patel had consulted Dr Sumant Shah for backache but on June 11, after his condition deteriorated, doctor noticed paralytic effect in lower half of his body. He was admitted to Karnavati Hospital and operated for spinal cord tuberculosis. Mr. Patel, on August 19, 1997, wrote to the OIC explaining that he was suffering from epilepsy and undergoing treatment since 1956. CERC and Mr. Patel explained that the failure to mention some minor ailment could not be construed as fraudulent suppression of material facts. Hence oriental Insurance company was ordered to pay the claim amount plus interest @8%. Case Study - 4 CERC wins against Mediclaim renewal A recent judgement of the Gujarat high Court directs insurance companies to renew Mediclaim policies on existing terms and condition. The Insurance Company is bound to renew the policy without excluding any diseases already covered under the existing policy even if the disease was contracted during the policy period. Consumer Education and Research Society (CERS) filed the case on behalf of policyholders after the insurance company rejected several cases. Case Study - 5 Insurance company told to pay Rs 75,000 The District Consumer Forum of Yamunanagar on July 11 ordered Oriental Insurance Company to pay Rs. 75574.62 and Rs 2513.05 with 12 per cent interest and Rs 5000 as compensation for harassment and litigation charges to Mr. G.D. Gupta of Mangat Pura, Jagadhri. Mr. Gupta had purchased a Mediclaim policy from the Oriental Insurance Company on November 1999. He fell ill in January 2000 and was admitted in Escorts Hospital, New Delhi for Angiography on January 29th 2000 and then in G.B. Pant Delhi for Angioplasty on February 18, 2000, while purchasing the policy, Mr. Gupta had submitted his E.C.G report and blood test report. The Insurance Company repudiated his claim by alleging that Mr. Gupta was a heart patient before the insurance of the policy as is apparent from the E.C.G report submitted by him while purchasing the policy. The District Consumer Forum in Yamunanagar has ordered Oriental Insurance Company to pay Claim against Mediclaim Policy Case Study - 6 The Delhi State Consumer Commission has passed judgement under which New India Assurance Company was ordered to pay Rs. 124166 in damages to one of its customers for having denied clearance for his Medicalim bills. The Commission said the clause of "non-disclosure of pre-existing disease" for dismissing claims is applicable only when the disease and its treatment occurs immediately after taking the policy. Setting aside an order by a district forum that had dismissed claims on Tirath Dass against The New India Assurance Co. Ltd., the commission allowed Dass" appeal. The insurance firm had rejected Dass' claims saying that he gave false information that the disease for which he got treated was not pre-existing. Dass had obtained a medical policy from the company on June 10, 1998. His woes began in May, 1999, when the company refused to accept his claims for expenses incurred for an operation for total hip replacement between September to December 1998. The Company also placed on record opinion of three doctors who said Dass's disease must have started at least two years before the treatment was sought. Das then moved a district forum but his claims were dismissed by it on December 5, 2001. Describing the company's act as "wrong", the Commission said. "To expect a person to disclose at the time of taking a Mediclaim policy about the disease for which he had never been treated, admitted or operatedupon is too much". Case Study - 7 NIACL to Pay Rs. 2.19 Lakh for Repudiating Mediclaim Policy Delhi State Consumer Disputes has instructed New India Assurance Company Ltd. to pay Rs. 2.19 lakh to a man who was denied reimbursement after undergoing cardiac bypass surgery, and held it guilty of "wrongful repudiation"of the mediclaim policy on the ground of concealment of pre-existing ailments. The Delhi State Consumer Disputes Redressal Commission while ordering the New India Assurance Company Limited (NIACL) to pay the amount said, "we cannot escape from arriving at the irresistable conclusion that disease referred to in the discharge summary was not such a disease that disentitled respondent of insurance policy. " The order came on an appeal filed by the NIACL against the order of a District Consumer Forum which, holding it guilty of wrongful, repudiating of policy of one S. K. Khosla, had asked it to pay the medical expenses in the tune of Rs. 1.74 lakh alongwith interest at the rate of nine percent from the date the same became due. However, the Commission headed by Justice J. D. Kapoor and Member Ruminita Mittal, though upheld the Forum's verdict, did away the interest part of the award and asked the company to pay Rs. 2.19 lakh as full and final compensation including the litegation cost. Learning from these case studies There may be hundreds of cases, where the customer who had the proper records and courage to fight. This hasresulted in judgement being decided in their favor has gone to insurance company, consumer forum. There may be thousands, who did not go because of lack of knowledge, sufficient supporting documents not being available.. From the details you will notice that courts go into facts, records with a view to pass tojudgment. Case Study - 8 ROYAL SUNDARAM TOLD TO PAY RS 24,000 FOR MEDICLAIM LAPSE Michael Gonsalves, Pune, June 29, 2009, Financial Chronicle The Pune District Consumer Court has ordered the Royal Sundaram Alliance Insurance Company to pay its med claim policyholder Rs 17,897 for a nose operation, Rs 5,000 as compensation and Rs 1,000 as cost of litigation. “Royal Sundaram Alliance Insurance Company is directed to pay the complainant Rs 17,897 with interest at 9 percent effective from April 3, 2006, when the claim was refused,” PK Gaikwad, president of Pune District Consumer Court and its members SG Joshi and JH Naik, said in their order passed on June 5. The order also directed the insurance company to pay all amounts to the complainant Neela Ambadas Deshpande, resident of Pune, within two months. The petitioner had complained against deficiency in service and alleged fraudulent means used by the company to deny her the med claim. Deshpande’s petition stated that she had drawn a med claim insurance policy of Rs 1.5 lakh every year from 2005 to 2007 from Royal Sundaram Alliance Insurance Company at its Law College Road, Pune branch and paid her annual premiums of Rs 3,900. The company had also sanctioned her cumulative bonus of Rs 22,500 on February 2, 2006 when she renewed her policy in that month. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx NEW DELHI: The Supreme Court has ruled that public sector insurance companies cannot refuse to provide medical cover policies to those suffering from pre-existing diseases and said such an action was arbitrary, illegal and unconstitutional. A bench of Justices S B Sinha and V S Sirpurkar also asked the Insurance Regulatory Development Authority (IRDA) to frame suitable guidelines to ensure that insurance companies, both from public sector and private sector, do not indulge in the unethical practice of denying medical insurance facility to the public. The apex court said public sector insurance companies in particular cannot indulge in such unhealthy practice as they are "State" within the meaning of Article 12 of the Constitution and were expected to be fair and reasonable in their dealings with the public. "Only because the insured had started suffering from a disease, the same would not mean that the said disease shall be excluded. If the insured had made some claim in each year, the insurance company should not refuse to renew insurance policies only for that reason.," the bench said in its judgement. The apex court passed the observation while dismissing a batch of petitions filed by public sector insurance companies against the Delhi and Gujarat High Court directions that they had no right to deny medical insurance facility to those suffering from pre-existing diseases or diseases contracted during the subsistence of a policy. UNITED INDIA INSURANCE CO. LTD. v. MANUBHAI DHARMASINHBHAI GAJERA & ORS. [2008] INSC 987 (16 May 2008) IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 4113-4115 OF 2008 (Arising out of SLP (C) No. 9876-9878 of 2004) United India Insurance Company Limited .... Appellant Versus Manubhai Dharmasinhbhai Gajera & Ors. .... Respondents WITH CIVIL APPEAL NOS. 4116 OF 2008 (Arising out of SLP (C) No. 10205 of 2004) New India Assurance Company Limited .... Appellant Versus Consumer Education and Research Society & Ors. .... Respondents AND 2 CIVIL APPEAL NOS. 3633 OF 2008 (Arising out of SLP (C) No. 1534 of 2006) United India Insurance Company Limited .... Appellant Versus Mukat Lal Duggal & Anr. .... Respondents S,B, SINHA, J. 1. Leave granted in all the matters. INTRODUCTION 2. Whether renewal of a mediclaim policy on payment of the amount of premium would be automatic, is the question involved herein. BACKGROUND FACTS 3. The Parliament enacted the General Insurance Business (Nationalisation) Act 1972 (for short 1972 Act) to provide for the acquisition and transfer of shares of Insurance Companies and 3 undertakings of other insurers in order to serve better the need of the economy by securing the development of general insurance business in the best interest of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for other matters connected therewith or incidental thereto. 4. Appellants are the two subsidiary insurance companies of General Insurance Corporation of India, carrying on the insurance business in terms of the 1972 Act. The General Insurance Companies had a monopoly over the business of general insurance whereas Life Insurance Corporation of India constituted under the Life Insurance Corporation Act, 1956 enjoyed the monopoly in respect of the business of life insurance. 5. The business activities of the insurance companies are governed by the Insurance Act, 1938 (for short the 1938 Act). In terms of the provisions of the said Act, an authority known as Insurance Regulatory and Development Authority (the Authority) was constituted by the Central Government in exercise of its power conferred upon it by clause 2(c) of Section 114 of the 1938 Act. 4 The Parliament also enacted the Insurance Regulatory and Development Authority Act, 1999. By the 1999 Act the Parliament inserted Section 24A in the 1972 Act directing cessation of the exclusive privilege of the Corporation and the acquiring companies in relation thereto. In exercise of the powers conferred by clause 2(c) of sub-section (2) of Section 114A of the 1938 Act read with sections 14 and 26 of the 1999 Act, the Authority made Regulations known as Insurance Regulatory and Development Authority (Protection of Policyholders' Interest) Regulations, 2002 (for short the 2002 Regulations). FACTUAL MATRIX 6. We may at the outset, briefly notice the facts involved in one of the matters Facts of Civil Appeal @ SLP (C) 1534/2006 7. Respondents No.1 obtained the mediclaim policy from the appellant in April, 1995 and renewed annually upon payment of the requisite amount of premium. After over three years namely, in July, 1998, Respondent No.1 suffered a coronary disease and was admitted in the Escorts Heart Institute and Research Centre where he underwent 5 `Angioplasty'. A claim made by him was paid by the appellant. In January, 2001 he was once again admitted to the Escorts Heart Institute and Research Centre and once again underwent `Angioplasty'. The amount claimed was duly reimbursed by the appellant to the respondent. In May, 2002 he was hospitalized in Holy Family Hospital for a minor operation and the medical expenses claimed to that effect were reimbursed by the appellant. In April, 2002 he underwent a bye-pass surgery. Respondent No.1 submitted his claim which, however, was not paid. 8. On 3rd April, 2003, the respondent approached the appellant for renewal of the policy and issued a cheque towards payment of the premium for the purpose of renewal of the policy w.e.f. 6th April, 2003, which was refused on the purported ground of `high claim ratio'. After serving notice, the said respondents filed a writ petition which was allowed by the learned Single Judge of the Delhi High Court by his order dated 7th January, 2005 directing the appellant to renew his mediclaim insurance policy. 9. An intra court appeal filed by the appellant was dismissed by reason of the impugned judgment and order dated 15th July, 2005. 6 We would notice the factual matrix involved in other matters at a later stage. PROCEEDINGS 10. Respondents in each of these matters entered into their respective contracts of insurance with the appellant company. They were not renewed. Contending that the appellant and other subsidiaries of the Corporation being `State' within the meaning of Article 12 of the Constitution of India, they must be fair and reasonable and keeping in view the principles enunciated in the Directive Principle of State policy as contained in Chapter IV of the Constitution of India, writ petitions were filed before the Gujarat High Court. 11. We need not notice the other details of the said proceedings save and except that the conclusions recorded by the Division Bench of the said Gujarat High Court were as under :- "39. For the foregoing reasons, we conclude as under : [1] The insured has an option under the existing mediclaim insurance policy to continue the cover by payment of renewal premium in time in respect of the sum insured. 7 [2] In case of renewal without break in the period, the mediclaim insurance policy will be renewed without excluding any disease already covered under the existing policy which may have been contracted during the period of the expiring policy. Renewal of mediclaim insurance policy cannot be refused on the ground that the insured had contracted disease during the period of the expiring policy so far as the basic sum insured under the existing policy is concerned. [3] In cases where the insured seeks an enhancement of the amount of sum insured at the time of renewal, the option to renew will not extend to the amount of such enhancement and renewal in respect thereof will depend upon the mutual consent of the contracting parties. [4] Renewal of a medical claim insurance policy cannot be refused, despite timely payment of the renewal premium, on the ground that continuance of the cover would become more onerous or burdensome for the insurer due to the insured contracting a covered disease during the period of the existing policy. [5] The insurer may refuse renewal, even in cases where the insured has an option to renew the policy on payment of the renewal premium in time, on the grounds, such as, misrepresentation, fraud or non-disclosure of material facts that existed at the inception of the contract and would have vitiated the insurance of the cover at its inception or non-fulfillment of obligations on the part of the insured or any other ground on which the performance of the 8 promise under the contract is dispensed with or excused under the provisions of the Indian Contract Act or any other law or when the insurer has stopped doing business. [6] The government insurance companies continue to be "State" within the meaning of Article 12 of the Constitution notwithstanding the entry of private companies in the field of general insurance, ending their monopoly by virtue of insertion of Section 24A in the Act of 1972, and they cannot arbitrarily cancel or refuse to renew an existing mediclaim policy." It was directed : "40. For the foregoing reasons, we find ourselves in agreement with the reasoning and conclusions of the learned Single Judge in the impugned order from which the Letters Patent Appeals No.1028 of 2003, No.1003 of 2003 and 1004 of 2003 arise, and there being no warrant for interference with the same, all the three appeals are, therefore, dismissed with costs. 40.1 For the foregoing reasons, since the grounds given for refusing to renew the mediclaim insurance policies of petitioners Nos. 2 and 3 are arbitrary and also against the contractual terms, the Special Civil Application No.9425 of 2002 is partly allowed, by holding that the refusal of renewal of the mediclaim insurance policy of the petitioners No.2 and 3 9 was arbitrary and illegal, and it is directed that the respondents insurance companies will renew their respective policies from the date on which they expired, on payment of the renewal premium payable by them under the Scheme, without excluding the diseases that may have been contracted by them during the period of their existing policies for the concerned year. Rule is made absolute accordingly with costs." CONTENTIONS 12. Mr. G.E. Vahanvati, learned Solicitor General of India, appearing on behalf of the appellant, submits :- 1) The High Court committed a serious error in holding that the contract of insurance is no longer in the realm of contract. 2) The insurance companies must function having regard to `commercial expedience' consideration in view of Section 24A of the Act. 3) Assuming that the appellant is a `State' within the meaning of Article 12 of the Constitution of India, the same by itself would not mean that it cannot enter into a contract with the policy holder on its own terms, particularly when such terms have been approved by the Authority. 10 13. Mr. Sameer Parekh, and Mr. Sawhney, learned counsel, appearing on behalf of the respondents, on the other hand, contends :- 1) The insurance companies having regard to their obligations not only in terms of the constitutional provisions but also the provisions of the 1938 Act, 1972 Act and 1999 Act; the Regulations framed thereunder and the guidelines issued, are bound to renew mediclaim policies from time to time on the same terms and conditions. 2) Appellants, in view of the decision of this Court, in Biman K. Bose v. United India Insurance Co. Ltd. [(2001) 6 SCC 477] are bound to act fairly and reasonably in the matter of renewal of its policies and wrongful refusal on their part must be to be an act of mischief resorted to cause harm to the insured which must be remedied. 3) Assuming that the insurance companies must address their business concern vis-a-vis the competition which they face from the other companies, the same does not mean that, despite being the `State' within the meaning of Article 12 of the Constitution of India, they would refuse to carry out their constitutional and statutory obligations, particularly in view of the fact that the 11 insurance business was acquired by the 1972 Act to subserve the public purpose. 4) Renewal of insurance policy, for all intent and purport, should be held to be automatic, subject of course to tender of the amount of premium of insurance in time inasmuch as in terms of the guidelines issued by the Authority, the policy is to be a continuous one. 5) The right to cancel the policy and refusal to renew the same must be held to be confined only to the exclusionary clauses contained in the policy. 6) The functions of the appellant being regulated by statutory guidelines and circulars issued from time to time, any departure therefrom must be held to be wholly unfair and mala fide. 7) The insurance companies being `State' are not only bound to comply with the constitutional scheme contained in the preamble of the Constitution of India but also the provisions of Section 10A and other provisions of the Act. 8) In any event the policies must be construed in favour of the insured in view of the maxim - contra proferentum and uberrimae fidei. 12 STATUTORY PROVISIONS, GUIDELINES ETC. 14. Sections 10-A, 19(2) and 19(3) of 1972 Act, which are relevant for our purpose, read as under :- "10-A. Transfer to Central Government of shares vested in Corporation.- All the shares in the capital of the acquiring companies, being-- (a) the National Insurance Company Limited; (b) the New India Assurance Company Limited; (c) the Oriental Insurance Company Limited; (d) the United India Insurance Company Limited, and vested in the Corporation before the commencement of the General Insurance Business (Nationalisation) Amendment Act, 2002 shall, on such commencement, stand transferred to the Central Government. Section 19 - Functions of acquiring companies (1) .... .... .... 13 (2) Each acquiring company shall so function under this Act as to secure that general insurance business is developed to the best advantage of the community. (3) In the discharge of any of its functions, each acquiring company shall act so far as may be on business principles and where any directions have been issued by the Central Government or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) shall be guided by such directions. (4) .... .... ...." 15. `Prospects' has been defined in the Regulation 2(1)(e) of the 2002 Regulations to mean a document issued by the insurer or in its behalf to the prospective buyers of insurance, and should contain such particulars as are mentioned in Rule 11 of Insurance Rules, 1939 and includes a brochure or leaflet serving the purpose. Such a document should also specify the type and character of riders on the main product indicating the nature of benefits flowing therefrom. 16. Regulation 6 provides for the matters to be stated in the insurance policy. 14 Regulation 7(1)(n) of 2002 Regulations read thus :- "7. Matters to be stated In general insurance policy.-- (1) A general insurance policy shall clearly state: (n) provision for cancellation of the policy on grounds of misrepresentation, fraud, non-disclosure of material facts or non-cooperation of the insured;" Regulation 11(4) reads as under :- 11. General.- (4) Any breaches of the obligations cast on an insurer or insurance agent or insurance intermediary in terms of these regulations may enable the Authority to initiate action against each or all of them, jointly or severally, under the Act and/or the insurance Regulatory and Development Authority Act, 1999." 17. Indisputably the Authority also issued guidelines on "File and Use" requirements for general insurance products; clause 3 whereof relate to IRDA requirements for consideration and review of products meaning thereby the insurance policies. The requirements specified by the Authority are:- 15 " i. Design and rating of products must always be on sound and prudent underwriting basis. The contingencies insured under the product should be clear and provide transparent cover which is of value to the insured. ii. All literature relating to the product should be in simple language and easily understandable to the public at large. As far as possible, a similar sequence of presentation may be followed. All technical terms should be clarified in simple language for the benefit of the insured. iii. The product should be a genuine insurance product of an insurable risk with a real risk transfer. "Alternate risk transfer" or "financial guarantee" business in any form will not be accepted. iv. The insurance product should comply with all the requirements of the Protection of Policyholders' Interests Regulations 2002. v. Insurers should use as far as possible, similar wordings for describing the same cover or the same requirement across all their products. For example clauses on renewal of insurance, basis of insurance, due diligence, cancellation, arbitration etc., should have similar wordings across all products. vi. he pricing of products should be based on appropriate data and with technical justification. vii. The terms and conditions of cover shall be fair between the insurer and the insured. viii. Margins built into rates shall be consistent with the experience of the insurer in respect of commission, management expenses, contingencies and profit. ix. 16 Insurer should take necessary steps in ensuring that competition will not lead to unprincipled rate cutting and other improper underwriting practices." 18. Guidelines 7 and 25 of the Guidelines issued by the IRDA on "File and Use:" requirements for general insurance products read as under :- "7. Till the tariffs are in force, it will not be necessary for any insurer to file information on any product that complies with tariff rates, terms and conditions. In respect of products that package insurance covers that are governed by tariffs, with those that are not, the insurer should file such products and confirm that the section governed by tariffs complies with tariff rates, terms and conditions for the portion that is governed by tariffs, as long as tariffs remain in force. 25. The documents to be filed in respect of every new product or revision of an existing product in respect of products classified under categories i. and ii. of para 19 above shall be as follows: iii. Statement filing particulars of the product in Form A; iv. Certificate by the Chief Executive Officer in Form B; v. Certificate by Appointed Actuary in Form C; vi. Certificate by the company's lawyer in Form D; vii. 17 Copies of Prospectus and other sales literature relating to the product; viii. Copy of Proposal Form; ix. Copy of Policy Form and copies of the standard endorsements to be used with the policy; and viii) Copy of the Underwriter's Manual in respect of the product along with the list of declined risks, if any. Important: While issuing the certificates under paras (ii), (iii) and (iv) above, persons responsible for issuing such certificates should carefully go through all the required aspects and apply due diligence. Serious view may be taken in case of any deficiencies." 19. Clauses 16 to 18 provide for the responsibility for compliance. 20. For the purpose of obtaining approval of the terms and conditions of the policy, the insurance companies are required to file the following documents before the authority in respect of a new product or any revision of an existing product, which includes a certificate by the company's lawyer as specified in Form D appended thereto. 21. The National Insurance Company being one of the subsidiary companies of the General Insurance Company issued a letter dated 18th December, 1998, inter alia, in the following terms :- 18 "Different situations which may arise during the renewal of insurance and how to deal with them are summarized below :- (1) In case of renewal without a break in the period the policy will be renewed including the disease contracted during the expiring policy period. (2) If there is a break, the fresh policy must specifically exclude the disease contracted during the expiring policy period and during the break period and it should be mentioned in the schedule of the Policy specifically (3) If an insured is already covered under an insurance policy, say, a group mediclaim, and wants to take an individual policy the same may be issued upto the identical sum insured on the same terms and conditions if there is no break. (4) If a person is insured with another subsidiary and wishes to renew with us, the same should be considered only after ascertaining the claim status and exclusion under the previous policy. In case the claim status revealed is adverse or there is a continuing illness or an impending illness, such cases should be advised to continue with the same subsidiary and should not be accepted." 22. The High Court has considered the matter under the following broad headings :- 19 a. The insurer have a public duty having regard to Article 47 of the Constitution of India. b. In view of the regulatory framework operating in the field it has a limited power to contract. c. The terms and conditions of the insurance policies provide for an automatic renewal, the pre-condition whereof is only timely payment of premium. d. The construction of a contract of insurance must be made having regard to the nature and principles underpinning a contract of health insurance. e. For the purpose of effective implementation of a contract of insurance as regards mediclaim policy, business considerations are wholly immaterial. f. Different kinds of policies would attract different principles. 23. There is no escape from the fact that the appellant is a `State' within the meaning of Article 12 of the Constitution. It has been created under the 1972 Act. The said Act, as the preamble shows, was enacted for achieving certain purposes, economic benefit of the people and/or group of people, being one of it. At the point of time when the 1972 Act 20 was enacted the insurance companies enjoyed a monopoly status. But would it mean that only because it ceases to enjoy the same by itself is sufficient to hold that it is not required to follow the constitutional or statutory norms? 24. If it is a `State' its action must be fair and reasonable. It has been so held in a catena of decisions of the Court as for example Peacock Plywood Plywood (P) Ltd. v. Oriental Insurance Co. Ltd. [(2006) 12 SCC 673 paragraphs 57 at page 691] and Life Insurance Corporation of India v. Consumer Education and Research Centre [(1995) 5 SCC 482]. 25. There cannot be any doubt that Directive Principles of State policy by themselves per se are not enforceable in a court of law. [See Kesavananda Bharati v. State of Kerala [(1974) 3 SCC 225]. 26. We would assume that it is one thing to say that the State is to make all endeavours to improve the public health but the same by itself would not mean that a contract of insurance governed by statute must receive construction in terms of the said provision or otherwise, the endeavour of the State should have been to direct compulsory insurance for all its citizens. Improvement of public health has been held to mean an obligation on the part of the State to put forth its policy to ecological 21 balance and hygienic environment, the later being an indirect facet of the right to healthy life. {Virinder Gaur and others v. State of Haryana and others [(1995) 2 SCC 577]}. {[See also Kirloskar Brothers Ltds. v. Employees' Stte Insurance Corporation [(1996) 2 SCC 682]}. 27. Even otherwise the term "health" may be given a wider meaning in the context of insurance. It may mean sound health. Collins English Dictionary defines "health" as :- "Health: the state of being bodily and mentally vigorous and free from disease, the general condition of body and mind: in poor health, the condition of any unit, society, etc.: the economic health of a nation, a toast to a person, wishing him or her good health, happiness, etc., (modifier) of or relating to food or other goods reputed to be beneficial to the health: health food; a health store., (modifier) of or relating to health, esp. to the administration of health: a health committee; health resort; health service., an exclamation wishing someone good health as part of a toast (in the phrases your health, good health, etc.)." 28. The functions of the insurance companies are governed by statute. A contract of insurance, therefore, must subserve the statutory provisions. It must indisputably be construed having regard to the larger public policy and public interest guiding nationalization of the insurance companies. 22 29. Insurance Sector is regulated. The provisions of the Insurance Act are applicable to all insurance companies irrespective of the fact as to whether they are in public sector or private sector. When a business is regulated, all concerned would be governed thereby. 30. It is one thing to say that the terms and conditions of a contract are statutory in nature but is another thing to say that the statute governs or controls the business itself. It is the latter which is applicable to the fact of the case. Two things are apparent. One, the Central Government has come out with a new economic policy. The monopoly status has been taken away from the General Insurance Corporation of India and its subsidiaries. The insurance companies are required to compete with others in the field, but the same may not necessarily mean that despite the statutory interdicts the public sectors insurance companies must have a level playing field with the private insurance companies. 31. We have, despite the new economic policy of the Central, no option but to proceed on the assumption that the public sector insurance companies being a State have a different role to play. It is not to say that as a matter of policy statutory or otherwise the insurance companies are 23 bound to regulate all contracts of insurance having the statement of Directive Principles in mind but there cannot be any doubt whatsoever that fairness or reasonableness on the part of the insurance companies must appear in all of its more  

i agree with HV Nath that the medi insurance companies show you a very rosy picture at the time of proposal and then come up with flimsy excuses to deny genuine claims, after having had the benefit of long years of claim-free paid premiums. Both the principal and the TPA work in collusion to look for ways & means to deny claims. Its a big racket and normal citizen accepts it under duress or due lack of knowledge. we need to share important case laws of supreme court and national consumer commission to spread awareness. more  

I represent a health insurance company which provides claim for the consumables without charging anything extra. The premium is also quite reasonable. Pls provide me your contact number. I will provide you the complete details. My email id is shahi1981@gmail.com. more  

That might increase the premium payment. more