Karnal District Commission Holds ICICI Lombard General Insurance Co. For Partial Disbursement Of Health Insurance Amount

Brief Facts:

Mr. Rakesh Kumar (“Complainant”) was a beneficiary of a Group Health Insurance Policy (Medi-Claim) from the ICICI Lombard General Insurance Company Limited (“Insurance Company”), covering himself and other beneficiaries, including his wife and daughter. The policy was dated 26.04.2019, valid from 26.04.2019 to 25.04.2021, with a sum assured of Rs. 5 lakh. Subsequently, in March 2021, the Complainant fell ill and was admitted to Virk Hospital, Karnal, and incurred expenses amounting to Rs. 1,92,969/- for treatment, medicines, and hospitalization. Upon submission of the claim, the insurance company only disbursed Rs. 25,000/-, leaving a balance of Rs. 1,67,969 unpaid. Despite the Complainant's requests, the insurance company failed to provide a satisfactory explanation for the outstanding amount. The Complainant made several communications with the insurance company but didn't receive any satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Karnal (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company contended that it settled the Complainant's claim for Rs. 25,000 while justifying deductions totalling Rs.1,67,969. These deductions were attributed to admission or registration charges, non-submission of an investigation report, and exhaustion of sub-limits. It argued that the complaint involved intricate questions of fact necessitating extensive evidence and trial, and suggested that it fell within the purview of a Civil Court rather than the Consumer Protection Commission.

Observations by the District Commission:

The District Commission held that the burden of proving its version rested with the insurance company. Despite relying on the policy schedule and Key Information sheet, the insurance company could not establish that these documents were explained and supplied to the Complainant. Additionally, it held that the insurance company did not clarify the criteria for deducting a substantial amount from the medical bills.

The District Commission held that there is a tendency for insurance companies to rely on policy clauses to evade their liabilities, emphasizing that such practices constitute a deficiency in service. Consequently, it held the insurance company liable for deficiency in services.

Consequently, the District Commission directed the insurance company to pay the remaining medical bills of Rs. 1,67,969/-, along with interest at 9% per annum from the date of filing the complaint. Furthermore, the insurance company was instructed to pay Rs. 25,000/- for the Complainant's mental agony and harassment and an additional Rs. 11,000/- for litigation expenses.