The Union finance ministry has been asked by a Delhi consumer forum to deal strictly with the private insurance firms and consider cancelling their licences for harassing customers and illegally rejecting their claims.
The East District Consumer Disputes Redressal Forum made this recommendation while ordering Apollo Munich Health Insurance Co Ltd to pay over Rs 180,000 to a policy holder for not reimbursing his treatment expenses and illegally cancelling his insurance cover after he submitted his claim.
"Private insurance firms are resorting to such acts just to save the amount which they are legally bound to reimburse to policy holders.
"This needs to be dealt with by appropriate authorities and license of such companies may be considered to be cancelled," said the forum's bench presided by N A Zaidi.
"Let copy of this order be forwarded to Secretary (Finance), Ministry of Finance, Govt. of India for perusal and strict action," it added.
The forum gave this order holding that the insurance firm "harassed and traumatised" the insured by their 'unlawful action' and 'illegal methods' to deny his rightful claim under the policy.
"Complainant (policy holder) of this case has been harassed, traumatised by the opposite party (Apollo Munich) by their unlawful action and illegal methods to deny rightful claim under the policy," the bench said, directing the insurance firm to reimburse the medical expenses of over Rs 140,000
The forum also comprising member T Vijayan observed that the policy holder had already been admitted for treatment prior to cancellation of his policy and refund of the premium and as he had already submitted his claim such termination "shall be deemed to be a device to deny his rightful claim."
The order of the forum came on the plea of Delhi resident Ashok Kumar, who had bought a Health Shield insurance policy from Apollo Munich valid from November 25, 2010 to November 24, 2011 for a sum of Rs 200,000.
Kumar had alleged that Apollo Munich had rejected his claim for medical expenses and cancelled his insurance policy after he submitted his claim for reimbursement.
The insurance firm in its defence had contended that Kumar's policy was terminated and his premium refunded as he had concealed that he was a diabetes patient.
The forum, however, rejected the contention saying the insurance firm renewed Kumar's policy not once but twice and 'it was their duty to have him medically examined before renewal of the policy'.
