Insurance firms penalised for repudiating claim

Tribune News Service

Amritsar, January 28

The district consumer disputes redressal forum has directed MD India Healthcare Services and The Oriental Insurance Company Ltd to pay Rs 3 lakh to a local resident along with Rs 5,000 as litigation expenses for repudiating his insurance claim.

Balwinder Singh, a resident of Sarangra village, near Ajnala, had filed a complaint against MD India Healthcare Services and Oriental Insurance, stating that he had got a medical insurance from the opposite parties. Balwinder is a state government employee. He said that he fell ill on March 28, 2015 and was admitted at DMC, Ludhiana, till May 7, 2015 and spent Rs 4,87,998 on his treatment.

The complainant was insured for Rs 5 lakh and he had informed the opposite parties about his hospitalisation. He said that the cashless medical treatment was denied to him and later his attempts for reimbursement, too, went futile.

While MD India Insurance was proceeded against ex-parte, Oriental Insurance in its reply stated that as the contract was between the firm and the state government, the insured was not a party and hence only the state government was legally entitled to file the complaint pertaining to insurance claim.

The reply also stated that the treatment could be taken only from government hospitals or the institutes empanelled by the government.. It further stated that committees for grievance redressal had been constituted by the government at the district level, so the consumer forum had no jurisdiction to hear the complaint.

Differing with the contention of the opposite party that the consumer forum had no jurisdiction, the forum held that Consumer Protection Act was not in derogation of any other law. It stated that the provisions of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. The forum further stated that the government had collectively paid premium on behalf of the insurer and as such opposite party cannot wriggle out from its responsibility to reimburse the complaint. The forum further stated that the said hospital was empanelled by the government.

According to the forum, as per the condition of the Punjab Government Employees and Pensioners Health Insurance scheme, it is clear that it provides coverage for meeting all expenses relating to hospitalisation of beneficiary members up to Rs 3 lakh per family per year. The forum stated that the complainant can claim the remaining amount separately under law.

The case

• Balwinder Singh, an employee of Punjab goverment, fell ill on March 28, 2015 and underwent treatment at DMC, Ludhiana. 
• He paid Rs 4,87,998 for the treatment but MD India Healthcare Services and Oriental Insurance refused to reimburse it.
• Oriental Insurance contends that the contract is between it and the state government so insured man shouldn't have filed such a complaint.
• Consumer forum observes that since premium was paid by the government, the firm couldn't run away from its responsibility.
• MD India Insurance was proceeded against ex-parte.