Insurance Co. Not Under Obligation To Renew Old Policy After Expiry, Goa State Commission Dismisses Appeal Against National Insurance Co. Ltd.

Brief Facts:

Mr Vijay Kapoor (“Complainant”) had a medical insurance policy with National Insurance Company Limited (“Insurance Company”) for ten years, covering various medical conditions. The Complainant took benefits out of the Policy during his treatments. However, when he tried to renew the policy for 2019-2020, the Insurance Company refused, citing discontinuation of the policy due to losses. The Complainant argued that this was arbitrary and left them without medical cover, a right under the Constitution of India. Despite efforts to resolve the issue, no redress was provided by the Insurance Company. Furthermore, the Complainant claimed that he was misled into purchasing a new policy at a much higher premium, which had more restrictions and co-payments compared to the original policy. The Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, North Goa (“District Commission”). He sought reinstatement of the original policy or compensation for uninsured medical events, along with various costs and expenses. However, the District Commission dismissed the complaint. Dissatisfied by the order of the District Commission, the Complainant filed a consumer complaint in the State Consumer Disputes Redressal Commission, Goa (“State Commission”).

In response, the Insurance Company contended that the policy in question was started in 2008 and continued for 10 years until October 2018, after which it was withdrawn nationwide, not specific to any region or person. Consumers were informed in advance, and policies expiring between October 2018 and December 2018 were allowed to be renewed for one year only, provided it was done on time or within 30 days of expiry. Renewals due on January 1, 2019, and later were not allowed, but policyholders could migrate to alternative products. The Insurance Company further argued that there was no contractual obligation to continue or renew the policy after its withdrawal, as there was a specific condition stating that renewal may be done by mutual consent. Additionally, the Insurance Company pointed out that they settled three claims of the Complainant under the policy in question and that the benefits of the insurance were continued until the expiry of the policy in June 2019.

Observations of the Commission:

The State Commission found that the Complainant had already benefited from migrating to the National Mediclaim Policy and had received continuity benefits along with being insured under the new policy. It noted that sufficient intimation had been provided to all consumers regarding the discontinuation of the previous policy and the options available for renewal or migration. The State Commission also determined that there was no misrepresentation in selling the new policy to the Complainant and that he had paid the premium for the National Mediclaim Policy. Additionally, the State Commission stated that the judgments cited by the Complainant did not apply to the case, as the discontinuation of the policy was nationwide and not arbitrary. It agreed with the reasoning of the District Commission and found no grounds for interference. Consequently, the appeal was dismissed.