Karnataka

Bangalore 4th Additional

CC/1663/2017

Sri R Shiva Prakash, - Complainant(s)

Versus

M/s Royal Sundaram General Insurance Company Limited, - Opp.Party(s)

S Vasanth Madhav

11 Sep 2018

ORDER

Complaint filed on: 21.06.2017

                                                      Disposed on: 11.09.2018

 

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027        

 

CC.No.1663/2017

DATED THIS THE 11^th SEPTEMBER OF 2018

 

PRESENT

 

SRI.S.L.PATIL, PRESIDENT

SMT.N.R.ROOPA, MEMBER

	Complainant/s	V/s	Opposite party/s
	R.Shiva Prakash, S/o Rama Murthy, Aged 59 years, R/o No.35, 1st Cross, Gopallappa Layout, Near Aiyappa Temple, Hebbal Kempapura, Bengaluru-24.   By.Adv.K.R.Padmanabhaiah	1	M/s Royal Sundaram General Insurance Company Limited., A Company registered under the Indian Companies Act, Having its Registered Office at No.21, Patullos Road, Chennai-600 002. Rep by its Managing Director
		2	M/s Royal Sundaram General Insurance Company Limited., Having its Zonal Office at Door No.30, Opp to Kanteerava Stadium, Off Richmond Road, JNR City Centre, Bengaluru- 560 027. Rep by its Zonal/Division Manager.   By.Adv.Manoj Kumar M.R.

 

PRESIDENT: SRI.S.L.PATIL

 

1.       The Complainant has filed this complaint as against the Opposite Parties directing to enhance the sum insured of the complainant from Rs.one lakh to Rs.Ten lakhs holding that the refusal to enhance the sum insured as deficiency of service and to pass such other orders.

 

2.       The brief facts of the case of the complainant are that the complainant availed a health insurance with the OP for the last ten years with Policy No.HS002103 30000109 and covered for Rs.1,00,000/- together with other three family members of the complainant who are also covered Rs.1,00,000/- each. The said policy is now renewed upto 8.6.2018 and valid till date. The existing Medisafe policy was issued on 9.6.2017 till 8.6.2018. The complainant requested and demanded that the health insurance respect of the complainant be enhanced from the existing Rs.1,00,000/- to Rs.10,00,000/- and floater and made several representation to this effect to the OP. The letter dt.12.5.2017 addressed by the complainant to the OP. The OP replied to the said queries contending that there is difficulty in increase the sum insured as per underwriting guidelines. What are the guidelines and whether it is statutory is not forthcoming. The OP directed the complainant to approach the Ombudsman in this regard. The complainant accordingly made a representation to the Ombudsman seeking to direct the OP to enhance the sum insured and floating and the Ombudsman without application of mind and in a very casual manner replied that the relief sought for enhancement of sum insured and floater is not within the purview of the Ombudsman and the complainant letter dt.26.5.2017 addressed to Insurance Ombudsman. The complainant having insured with the OP for the last ten years is entitled both in law and on the principles of natural justice. The complainant submits that the he cannot insure his health anywhere else and therefore, the OP looking into the long relationship and the other issues ought to had enhanced the sum insured and also floating and the OP having enjoyed the premium for the last ten years ought to had considered all aspects and instead the replies by the OP is totally illegal and unsustainable. The deficiency in service of the OP is glaring and on the face of record. The letter dt.30.5.2017 issued by the OP to the complainant refusing to enhance the insurance limits. The OP issued letter dt.2.6.2017 to the complainant and the letter of OP dt.23.5.2017. The letter issued by Ombudsman dt.31.5.2017 to the complainant.  The letter of Op dt.17.5.2017 addressed to the complainant. The complainant diligently requesting the OP and also approached the grievance officer, the Ombudsman and failed in the sincere efforts made by the complainant and the OP without assigning any reason is delaying and ignoring the just demands of the complainant.  There is deficiency in the service by the OP and therefore, the complainant is sustainable before this Forum. Hence, the complainant submits to allow the complaint. 

         

3.       The notice was ordered to the Opposite Parties. The Opposite Party did appear and filed their version by denying the contents of the complaint filed by the Complainant.  

 

4.       The sum and substance of the version filed by the OP are that the complaint is lamentably lacking in any bonafide grievance against the OP as the present complaint is not regarding any bonafide claim under the health insurance policy, but is rather for the demand of enhancement of sum insured under the policy.  The terms and conditions of the policy are governed as per the underwriting guidelines of the answering Ops subject to IRDAI approvals and the laws of the land and the same cannot be altered at the whims and fancies of the complainant. Without prejudice, the OP submits that the complainant had taken a Medisafe Insurance Policy for self, wife, son and daughter with each insured for a sum of Rs.1,00,000/-. The Policy was issued for a period commencing from 9.6.2017 to 8.6.2018 under certificate No.HS00210330000110 subject to the terms and conditions. The above said policy was a continuation of insurance coverage for the complainant for the 11^th year since inception. The complainant had lodged repeated demands to the OP for the enhancement of the sum insured under the subject policy and to issue floater coverage for the same. The Ops replied to the demands stating that the same cannot be entertained as the OP has underwriting constraints as per their norms. Further, the same was also duly explained to the complainant over telephone. Inspite of the same, the complainant chose to renew the policy based on existing coverage. The complainant approached the Hon’ble Ombudsman, Bangalore on 26.5.2017 regarding the demand of enhancement of the sum insured. The Ombudsman vide letter dt.31.5.2017 dismissed the complaint stating that the matters relating to underwriting falls solely within the purview of the OP and their respective underwriting policies and the same is outside the purview of the Hon’ble Ombudsman’s adjudication.   The OP submits that there is no merit in the present complaint as the underwriting policies of the OP cannot be altered according to the whims and fancies of the complainant as the premium and the subsequent sum insured is based on the underwriting guidelines followed by the OP and also in accordance with the approvals granted by the IRDAI. Since the policy and its governing clauses are all subject to IRDAI approvals and are underwritten based on the underwriting principles of the OP, the insured cannot demand, as a matter of right, for any alteration of coverage or enhancement of sum insured. Further as per IRDAI portability guidelines, the complainant can always port to a different product with continuity benefits or even to a different insurance company with all continuity benefits. Since the complainant has the choice either to renew or port the policy, the complainant cannot be aggrieved by the refusal of the OP to tailor the policy issued to the complainant to suit their individual requirements. Further any alteration of policy coverage for the complainant alone would be a violation of underwriting norms, relevant IRDAI Regulations and approvals granted to the OP in carrying on the business of insurance.  The complainant in this case had been issued a policy subject to the same underwriting principles. At the time of policy inception, the complainant did not have any pre-existing disease and hence the risk was accepted. However, thereafter he has developed renal disease and suffering from chronic renal failure. Though the OP are duty bound to continue to provide insurance cover to the complainant as per the original sum insured, they are under no obligation whatsoever to increase the sum insured for a known risk factor, which goes against the principles of insurance and prudent underwriting policy. Enhancing the sum insured is equivalent to taking a fresh policy of insurance and insurance operates on the principle of probability whereas accepting a proposal with a known chronic case which will have recurrent claims will fall within the ambit of principles of certainty which when accepted will defeat the principles of insurance.  Further, present day health insurance policies are issued with a lifetime renewal condition. Hence, once a proposal is accepted, renewal of the same cannot be denied except on grounds of fraud, moral hazard or misrepresentation or non-cooperation by the insured. Accepting a proposal with a known chronic condition will result in recurrent payments tantamoutning to adverse selection and against underwriting principles approved by the Board of Directors of the OP and the Regulator (IRDAI). Hence, it is submitted that all insurance companies exercise caution and refrain from accepting proposals with a history of chronic pre-existing conditions. In this case, any fresh sum insured in respect of the insured would be treated as a fresh proposal and hence the chronic renal failure would be treated as a pre-existing condition by the OP. The Ops are dealing with public monies and have a duty to their stakeholders and to the general public not to underwrite risks which are certain in nature as they defeat the fundamental principle of insurance. Further, the complainant has miserably failed to establish any deficiency in service or unfair trade practice on the part of the OP.  On these grounds and other grounds prays for dismissal of the complaint.

 

5. The Complainant to substantiate his case, filed his affidavit evidence and got marked as Ex-A1 to A9. The Opposite Party has also filed their affidavit evidence and got marked as Ex-B1 to B4. The Complainant as well as Opposite Party, filed their written arguments. Heard both sides.                                                                                                                                                                                                                                                                                                                                                                                              

           

6. The points that arise for our consideration are:

1) Whether the Complainant proves the deficiency in service

    On the part of the OPs, if so, whether he is entitled for

    the relief sought for?

          2) What Order?

                  

 

7.  Our answers to the above points are as under:

 

Point No.1: Negative 

Point No.2: As per the final order for the following

REASONS

 

8. POINT NO.1 :   We have briefly stated the contents of the complaint as well as the version of the Opposite Party.

 

9.       The only grievance of the complainant is that he requested and demanded his health insurance to be enhanced from the existing Rs.1,00,000/- to Rs.10,00,000/-.  In this context, he made several representations to the OP.  According to the case of the complainant, the OP replied to the queries contending that there is difficulty in increase the sum insured as per underwriting guidelines.  Hence, the OP directed the complainant to approach the Ombudsman. Accordingly, he approached the banking ombudsman who without any application of mind and in a very casual manner replied that the relief sought for enhancement of sum insured and floater is not within the purview of the Ombudsman. The complainant also submits that though he is entitled for enhancement from the existing Rs.1,00,000/- to Rs.10,00,000/- which has been denied by the Op. This itself is deficiency of service. Per contra, the OP has taken the specific contention stating that the complaint filed by the complainant is lacking merits and liable to be dismissed. Further submits that the    terms and conditions of the policy are governed as per the underwriting guidelines of the Ops subject to IRDAI approvals and the laws of the land and the same cannot be altered at the whims and fancies of the complainant. Without prejudice, further submits that the complainant has taken a Medisafe Insurance Policy for self, wife, son and daughter with each insured for a sum of Rs.1,00,000/-. The said Policy was issued for a period commencing from 9.6.2017 to 8.6.2018 under certificate No.HS00210330000110 subject to the terms and conditions. The said policy was a continuation of insurance coverage for the complainant for the 11^th year since inception. The complainant had lodged repeated demands to the OP for the enhancement of the sum insured under the subject policy and to issue floater coverage for the same. In this context, the Ops replied to the demands of the complainant stating that the same cannot be entertained as the OP has underwriting constraints as per their norms. This fact has been explained to the complainant. The OP also has taken the specific contention that the complainant approached the banking ombudsman therein also his claim has been denied.

 

10.     The specific contention taken by the OP is that the complaint filed by the complainant is no merit as the underwriting policies of the OP cannot be altered as a matter of right, the complainant cannot claim such a relief for any alteration of coverage or enhancement of sum insured. As per IRDAI portability guidelines, the complainant can always port to a different product with continuity benefits or even to a different insurance company with all continuity benefits. Since the complainant has the choice either to renew or port the policy, the complainant cannot be aggrieved by the refusal of the OP to tailor the policy issued to the complainant to suit their individual requirements. Further any alteration of policy coverage for the complainant alone would be a violation of underwriting norms, relevant IRDAI Regulations and approvals granted to the OP in carrying on the business of insurance.  Further, the OP has taken specific contention stating that the complainant in the instant case had been issued a policy subject to the same underwriting principles. At the time of policy inception, the complainant did not have any pre-existing disease and hence the risk was accepted. However, thereafter he has developed renal disease and suffering from chronic renal failure. Though the OP are duty bound to continue to provide insurance cover to the complainant as per the original sum insured, they are under no obligation whatsoever to increase the sum insured for a known risk factor, which goes against the principles of insurance and prudent underwriting policy. Enhancing the sum insured is equivalent to taking a fresh policy of insurance and insurance operates on the principle of probability whereas accepting a proposal with a known chronic case which will have recurrent claims will fall within the ambit of principles of certainty which when accepted will defeat the principles of insurance.  Further, submits that present day health insurance policies are issued with a lifetime renewal condition. Hence, once a proposal is accepted, renewal of the same cannot be denied except on grounds of fraud, moral hazard or misrepresentation or non-cooperation by the insured.  Accepting a proposal with a known chronic condition will result in recurrent payments tantamoutning to adverse selection and against underwriting principles approved by the Board of Directors of the OP and the Regulator (IRDAI). Hence, all the insurance companies exercise caution and refrain from accepting proposals with a history of chronic pre-existing conditions. In the instant case, any fresh sum insured in respect of the insured would be treated as a fresh proposal and hence the chronic renal failure would be treated as a pre-existing condition by the OP. It is also submitted that the Ops are dealing with public monies and have a duty to their stakeholders and to the general public not to underwrite risks which are certain in nature as they defeat the fundamental principle of insurance. In this context, we find there is considerable force in the contention taken by the OP that any fresh sum insured in respect of the insured would be treated as a fresh proposal and hence the chronic renal failure would be treated as a pre-existing condition by the OP. Hence, the complainant as a matter of right, cannot demand the health insurance be enhanced from the existing Rs.1,00,000/- to Rs.10,00,000/-. Accordingly, we come to the conclusion that there is no deficiency of service on the part of the Ops. Accordingly, this point is answered in the negative.

 

11.     POINT NO.2: In the result, we pass the following:

 

ORDER

 

The Complaint filed by the Complainant is dismissed.

Looking to the circumstances of the case, we direct both the parties to bear their own cost.

 Supply free copy of this order to both the parties.

 

          (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the open Forum on 11^th September 2018).

(ROOPA.N.R)     MEMBER

(S.L.PATIL)     PRESIDENT

 

 

 

1. Witness examined on behalf of the complainant/s by way of affidavit:

R.Shiva Prakash who being Complainant was examined. 

Copies of Documents produced on behalf of Complainant/s:

 

Ex-A1	Medisafe policy
Ex-A2	Letter of OP dt.12.5.2017 to the complainant
Ex-A3	Complainant letter dt.26.5.2017 to insurance company
Ex-A4	OP letter dt.30.5.2017 to the complainant refusing to enhance the insurance limits
Ex-A5	OP letter dt.2.6.2017 to complainant
Ex-A6	E-mail to OP and Insurance Ombudsman
Ex-A7	Letter of Op dt.23.5.2017
Ex-A8	Letter of Ombudsman dt.31.5.2017 to complainant
Ex-A9	Letter of OP dt.17.5.2017 to complainant
Doc	Letter dt.17.4.2018 issued by the OP

 

 

2. Witness examined on behalf of the Opposite party/s Respondent/s by way of affidavit:

S.K.Sandeep, State Head Legal & TP claims, who being OP-1 was examined.

Copies of Documents produced on behalf of OP   

 

Ex-B1	Policy along with terms and conditions
Ex-B2	Letter dt.23.5.2017
Ex-B3	Letter addressed to the Hon’ble Ombudsman
Ex-B4	Letter of dismissal from the Hon’ble Ombudsman

 

 

 

(ROOPA.N.R)       MEMBER

(S.L.PATIL)    PRESIDENT