Increased Premiums By Mere Change In Policy's Name, Bangalore District Commission Holds ICICI Lombard General Insurance Co. Liable

Brief Facts:

The Complainant initially purchased the 'Smart Health Insurance Basic' policy from Bharti Axa with a sum insured of INR 2,00,000/-, under the assurance of lifelong renewal. He continued renewing this policy annually. However, during the renewal process for the year 2021-2022, Bharti Axa demanded a significantly increased premium of Rs. 10,350/-, compared to the previous Rs. 4,852/-. Despite the unexpected hike, the Complainant paid the premium.

Subsequently, for the policy renewal in 2022-2023, Bharti Axa proposed an even higher premium of Rs. 61,533/- for a revised sum insured of Rs. 5,00,000/-, under a policy renamed 'Smart Health Super'. The Complainant, feeling financially burdened and facing the risk of being uninsured, attempted to secure an alternative policy through numerous communications to the Bharti Axa's officials but received no response. Feeling aggrieved, the Complainant filed a consumer complaint in the Additional District Consumer Disputes Redressal Commission-II, Bangalore Urban, Karnataka (“District Commission”) against Bharti Axa (later merged into ICICI Lombard General Insurance).

In response, Bharti Axa argued that the Insurance Regulatory & Development Authority of India (IRDAI) oversees and regulates all insurance policies in India, including premiums. It maintained that the premium increase was necessitated by factors such as medical inflation and market dynamics and was duly communicated to policyholders in compliance with IRDAI directives. It emphasized that the revised policies offered broader coverage and that premium adjustments were made based on the insured's age and coverage preferences.

Observations by the District Commission:

The District Commission noted that Bharti AXA merged with ICICI Lombard General Insurance in January 2021 which led to subsequent policy renewals under the new entity. However, the District Commission held that ICICI Lombard issued a renewal notice demanding an annual premium of Rs. 61,533/- for a revised policy named 'Smart Super Health Insurance', without obtaining the Complainant's consent.

The District Commission referred to IRDAI guidelines and noted that any change in base premium rates should not exceed 15% of the originally approved rates. The District Commission found that ICICI Lombard's decision to substantially increase the premium by merely changing the policy name constituted unfair trade practice and deficiency of service.

Therefore, the District Commission ordered ICICI Lombard to continue renewing the Complainant's original policy, 'Smart Health Insurance Basic', with a sum insured of Rs. 2,00,000/-. Additionally, ICICI Lombard was directed to compensate the Complainant with Rs. 52,000/- for medical expenses related to eye treatment and to pay Rs. 2,000/- towards litigation costs.

Case Title: Mr K. Velu vs ICICI Lombard General Insurance

Case Number: 286/2023

Date of Order: 10.06.2024