If not satisfied with the way a grievance has been addressed, try the ombudsman forums before taking to legal redressal.
Amina Sheikh, 80, fought a bitter battle with the National Insurance Company for two years in the Consumer Disputes Redressal Forum of South Mumbai before she was able to get the dispute resolved. Her grouse: The company had raised the medical insurance premium (Mediclaim) by 600 per cent during renewal.
On protesting, the premium was brought down to Rs 23,845 and Sheikh paid the amount to avoid a break. “The fact that a demand of Rs 32,787 was brought down to Rs 23,845 speaks volumes about the reasons behind the hike in premium and arbitrary demands according to the whims and fancies of the insurance company,” complained Sheikh.
The insurer said the increase was on account of Sheikh’s age at the time of renewal. This when the actual renewal premium payable was Rs 11,923. When Sheikh asked for recalculating the premium, the insurer cancelled the policy, saying Sheikh wasn’t happy with it. The insurer admitted loading the premium by 100 per cent, which was not contemplated under the terms and conditions of the policy.
In 2009, the Forum ruled in favour of the complainant, asking the insurer to treat the Mediclaim as valid and to repay the excess premium with an interest of nine per cent from the date of filing the complaint, within four weeks.
Consumer activist Jehangir Gai complains that insurance companies do not consider resolving the customer’s problem. “Even if threatened, insurers wait and watch, as most policyholders do not take the legal route,” he says.
DEFENCE
While this is one side of the story, insurers say such raises are necessitated because an older person may suddenly fall ill, causing a claim settlement which is large. Also, non-disclosure is the biggest problem they face, due to which claims get delayed. ”If we have the complete and correct information, we can take the decision on claims in a day,” says Hans Van Wuijckhuijse, COO, IDBI Federal Life Insurance.
Life Insurance Corporation took a year to reject Maya Devi’s claim after her husband died in 1999. Reason: He had concealed facts about being a diabetic for the previous 10 years. “This fact could only have been disclosed at the time of his medical treatment by himself. Laboratory tests done by the hospital further confirmed it. No evidence has been produced by the claimant on whom the onus was. Her contention that this disease was not detected at the time of medical examination by the doctors of the insurer is not credible because these check-ups are general and do not include pathological/blood tests,” said the ruling in May 2011. However, non-disclosure may not always amount to fraud, Wuijckhuijse says, and the policyholder can be paid the fund value.
Claim and surrender are among the top fraud risks, according to the findings of financial consultancy firm Ernst & Young’s Insurance Fraud Survey. The survey says fraud cases increased significantly in the past one year. About 56 per cent of the respondents said fraud had gone up by about 20 per cent. Most companies do not have a dedicated team to address the issue.
Applications constitute the second-largest risk, due to intermediaries and mis-selling. “There are more instances of mistakes in customer information when agents are involved. Customers give correct information when buying/renewing policies online themselves,” says Damien Marmion, CEO, Max Bupa Health Insurance. Fraudulent claims are more in cases where third-party administrators are involved.
If you have complaints, you can reach out to your insurer. If unresolved for a month, you can approach the grievance redressal cell of the Insurance Regulatory and Development Authority. If unsatisfied, you could knock the ombudsman’s door. After which, there is the consumer disputes forum.
