ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

This is the Complaint filed by the Complainant U/S Section 12 of Consumer Protection Act 1986, against the Opposite Party (herein referred in short as O.P) alleging the deficiency in service in not renewing the insurance policy after receiving the premium for deficiency in service in not informing him well in advance regarding discontinuance of the policy which he had obtained, and for providing the policy on the same terms and conditions and on the same premium which he was paying till the end of his life and to take appropriate action against OP1 for cancelling and revoking the license of insurance on their failure to honor the policy conditions to direct OP to conduct orderly business as per the terms of the license and refrain from permitting discontinuance of the product without ensuring proper migration for existing policy for compensation for causing mental agony and for other relief as the forum deems fit.

2.      The brief facts of the complaint are that;

The complainant obtained insurance from OP1 and the same was termed as HEALTH FOR EVER on 13.05.2015 by paying Rs.16,297/- being the premium for a year.  The sum assured was Rs.4,00,000/-. The same was renewed till 2019-20 by paying the annual premium.  There was no claim till 2019-20 and the no claim bonus of Rs.2,40,000/- has been added to his policy.  He was paying Rs.16,297/- as premium every year.  The said policy came up for renewal.  At that time OP did not send the notice of renewal. On the other hand OP also did not inform him well in advance regarding the discontinuation of the “Health For Ever policy”. On the other hand, it requested him to pay premium of Rs.34,851/- per year to port the insurance from the “HEALTH FOREVER” to “LIFE LINE” policy for only Rs.4,00,000/- by giving a short time notice, which amounts to unfair trade practice which is against to sec 2(1)r of the C.P. Act.  As per the IRDAI guidelines, the policy holder should be given and inform choice in respect of choosing his policy on the withdrawal of the scheme. No such notice has been given to him.  OP2 which is a licensing authority of the insurance has to take proper action against the insurance company. Afterwards he sent Rs.16,297/- being the premium amount towards the insurance which OP 1 got it encashed.  The act of OP clearly is manipulative pricing as defined u/s 2(1)(nnn) and an unfair restrict i.e., trade practice as per sec 2(1)(c)(1)(i) of the C.P.Act.  He is already 68 years and cannot get any insurance from any of the insurance companies.  OP1 has taken the shelter under porting possibility available and wants him to go for another insurance company if he did not accept the increase premium demand, which is again unfair trade practice. When OP1 discontinues the existing policy based on financial viability, it is equally bound to protect the interest of the policy holder and that it cannot be indiscriminately charged. Section 14(2) of the IRDAI Act prescribes the duties of OP2 in regulating the insurance companies. Under the circumstance there is deficiency in service on the part of OP 1 and 2 and hence prayed the forum to allow the complaint.

3.      Upon the service of notice, OP1 appeared before the Commission through its advocate and filed its version and contended that the complaint is bad for suppression of material facts and misrepresentation by the complainant. It is wholly misconceived on the ground that the health insurance product given to the complainant was withdrawn as per the guidelines of the IRDAI with effect from 01.10.2019 and the complainant though he subscribed to the insurance of “Health For Ever” by paying a fixed premium of Rs.16,297/- till the end of his life, was intimated regarding the withdrawal of the policy and was provided a suitable alternate product instituted by it in its place captioning the said policy as “Life Line Policy” along with other consequential reliefs, which the complainant did not agree for paying higher premium. Hence 90 days prior intimation regarding withdrawal of the policy to the complainant was issued which the complainant willfully denied.  Complainant had not made out any ground for grant of relief and filed this complaint in order to make illegal gains.

4.      It is contended that the complainant obtained from OP1  “Health For Ever Policy” from 14.05.2015 for the sum assured of Rs.4,00,000/- by paying an annual premium of Rs.16,297/- per year and renewed the same every year and as there was no claim for all these years,  the insured amount was increased to Rs.6,40,000/-.

5.      As per the IRDAI mandate, every company needs to review its insurance product and to see that it is viable through proper evaluation every year and to report to the IRDAI.  Accordingly, it carried out a review of the above product and found that the “Health Forever” scheme no longer financially viable. Hence as per the regulatory guidelines, it withdrew the product with effect from 1^st October 2019 from the market.  The decision of withdrawing the said policy is purely based on the financial performance of the product and provisions available in health insurance regulation 2016 for withdrawal of a loss making product. Hence the withdrawal of the said policy “Health Forever” from the marked was intimated to the complainant through a letter dated 03.01.2020 sent through speed post and also informed that the said product is no longer in existence and would not be possible for the insurance company to renew the said policy and as per the regulations permission was granted for him with right of portability and requested the complainant to port to any other existing policy and opt for any other suitable product of any other insurer available in the market.  It also offered to the complainant there flagship product “life line” which is a retail health plan similar to the “Health Forever” which was its highest selling retail health insurance policy without any medical test.

6.      It is further contended that the earlier health insurance policy “Health Forever” was a retail policy and the one offered as life line policy is also a retail plan with the same sum insured and offered similar health cover it is no claim bonus and also agree to transfer the benefits to the complainant if he chooses for lifeline policy.  It is further stated that during migration and withdrawal of a health product it is a practice of the insurance company to send notice 90 days in advance.  In this case also, it has sent notice of withdrawal of the scheme well before 90 days of the renewal.

7.      It is further contended that the complainant was paying Rs.16,297/- + taxes towards premium of “Health Forever Policy”.  Since the same was withdrawn from the market, and as the premium for ‘life line’ policy was Rs.34,851/- + taxes, and when the complainant was offered the same, the complainant refused to accept the same for paying the premium of Rs.34,851/-.  Unlike the life insurance policy where the premium is constant throughout the term, in the health insurance policy, due to medical inflation and cost of treatment in the hospital, the premium charges do changes. The premium for health insurance policy is fixed on the risk dependent and it is bound to change, will change is age.  The complainant was paying the same premium for last five years in respect of health forever policy, even though the cost of hospital treatment has gone up steeply.  The complainant was also informed that he would get several benefits under life line policy if he opt for the same.

8.      Inspite of it, complainant for the reasons best known to him, and also that his policy would expire on 17.05.2020 he sent a cheque for Rs.16,297/- being the premium amount for renewal of the policy for the next year and OP under obligation to continue the policy encashed the said cheque.  However the complainant had much before received, the letter of withdrawal of the policy from market from it much prior to the date of renewal and there were several email correspondences exchanged between.  He was also informed regarding the port of the policy. Knowing well that the policy issued to him earlier has been taken out from the market, and not in existence, he still issued a cheque and the OP under the impression that the complainant has agreed to port his policy to “Life Line Policy”, accepted the said cheque and encashed the same. It also issued the letter demanding the balance of the premium amount towards the life line policy, which fact has been completely concede by the complainant.  The contention of the complainant that the health insurance policy “Health Forever” had to continue till his life time and withdrawing the said policy by OP1 is wrong.   It is contended that as per clause 12 of the policy document at

The product/plan may be withdrawn at any time, by giving a notice of 3 months to the proposer at the address recorded/updated in the policy.  When the policy is withdrawn, the product/plan shall not be available for renewal at the due date.  However, the cover under such policy shall continue till the expiry date shown in the schedule of the policy.  In the event of withdrawal of a product, company shall offer similar alternative product from its currently marketed product suites.

 It has right to withdraw the policy as per the guidelines and the same was intimated three months prior to its withdrawal. Complainant failed to examine the same. OP1 has followed the guidelines and acted accordingly. Hence the contention of the complainant that no notice is served and OP has no power to withdraw the policy cannot be accepted.

9.      It is further contended that the complainant has compared the premium rates of the earlier policy and the policy which was offered to him and found that it is high.  Each insurance company has their own method of premium rates, which differs from company to company on the basis of the claims and other ratio. Hence comparing the premium with other pear is improper and inappropriate.  Any product rising has been got approved by the regulator and there cannot be no raising policy arbitrarily. It depends on the insurer providing risk based premium as the premium at higher age is higher than it is at a lower age.  Hence customers who are at younger age, pays lower premium and who enter at higher age has to pay higher premium.  Complainant has based his reliance on the premium charged by the government for its ESI schemes, Ayushman Bharath, and other states sponsored schemes backed by the Union of the State Government. Whereas, OP is a private insurance company and is bound by the regulators.   

10.    It is contended by OP1 that the complainant wanted the port of the policy on the same premium rate which he was paying for his earlier policy. When once the product was withdrawn, IRDAI regulations do not permit the company to continue the policy on the same premium amount.  In the event of withdrawal of the product the company shall offer similar alternate product from its currently marketed product. Hence it has provided the option for life line or Arogya Sanjeevini Policy for the complainant to choose.  OP has strictly adhere to the terms and conditions and the guidelines of the IRDAI. There is no deficiency in service on its part and unfair trade practice in withdrawing the “Health Forever Policy” from the market. Hence the complaint is not maintainable and liable to be dismissed and prayed for the dismissal.

11.    OP2 after service of notice, sent a letter directly to this office stating that the matter is between the complainant and the OP1 and no relief is claimed against OP2. It is an Insurance Regulatory and Development Authority, a statutory body performing statutory functions. It is not rendering any services for consideration and there is no consumer service provider relationship.  The statutory functions performed by it cannot be construed as rendering of services for consideration in terms of the act.  The complainant is not a consumer and OP2 is not a service provider and hence the complaint is not maintainable against it. There is no averment or prayer against it.  It is only a Performa party and no relief sought from it and hence prayed the forum to dismiss the complaint.

12.    In order to prove the case, both the parties filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Parties?

2)       Whether the complainant is entitled to the relief prayed for in the complaint?

13.   Our answers to the above points are:-

POINT NO.1:          In the Affirmative

POINT NO.2:         Partly in the affirmative.

                                For the following.

REASONS

14.  POINT No.1:-

   Perused the complaint, version, affidavit evidence and the documents produced by respective parties.  It is not in dispute that the complainant obtained from OP1 a Health insurance under the name Health forever by paying Rs.16,297/- per year from 13.05.2015 and he got it renewed till 2020.  No claim bonus of Rs.2,40,000/- was also added making it as Rs.6,40,000/- as a sum assured for any claim made by the complainant in respect of his health problems.  It is his specific case that OP1 ought to have continued the “Health Forever Scheme” or in the alternate in case as per the agreement and terms and conditions of the health policy, in case the said product was withdrawn from the market, the company shall offer similar alternative product from its currently marketed product suites.  90 days clear notice of withdrawal of the product from the market ought to have been given to him which has not been followed.  

        15.   It is borne out from the records and also from the version of the OP that they withdrew the scheme of “Health Forever Policy” from the market on the ground that it is not viable financially and that they have taken permission from the IRDAI and the same was notified to the complainant well in advance by giving 90 days’ notice. Copy of the notice said to have been sent to the complainant is also produced.

        16.   The complainant has contended that no such notice has been issued to him that it is a created document, just to come out of its lacuna.  Though OP has taken up the contention that the notice was issued regarding withdrawing of the scheme “Health Forever Policy” from the market, no document worth believing is produced to show that the said clear notice of 90 days in advance has been served on the complainant or even sent through the post.

        17.   Further in the said letter it can be seen that the premium amount for “Health Forever” was Rs.16,297/-, has been enhanced to Rs.34,851/- for life line.  This is forth coming from Ex.P2 the renewal advice wherein OP1 has requested the complainant to get it renewed by paying premium of Rs.34,851/- for the “life line” insurance policy instead of the “Health Forever”.

        18.   The complainant’s further case is that he is already 68 years and no insurance company would give him fresh insurance and he will be subjected to medical examination and that he is already entitled for the benefits from the day one of taking the insurance policy from the OP1 i.e., “Health Forever” scheme and it is the bounden duty of the OP to continue the said scheme till his death and that the OP has no authority to raise the premium which is almost double the amount which he is paying to the health forever policy and that he is a retired person and cannot afford to pay hefty policy premium and hence in the prayer also he prayed the forum to continue the health forever policy on the same premium amount or direct the OP to provide the new health insurance scheme under lifeline on the same amount of premium.  

        19.   In Ex.P2 it is mentioned that

We are happy to confirm that the alternative product Lifeline is being offered with full portability benefit such as carry forward of waiting periods, pre-existing, No claim bonus, etc. To the extent of your expiring sum insured (SI) and Cumulative Bonus (CB).  In case, the SI offered by us is higher than your current SI in expiring policy, waiting periods will be applicable afresh for the difference in SI. Eg: Expiring SI-1,0,000 CB 60,000 (Total SI 1,60,000), offered SI under Lifeline-2,00,000, offered CB-60,000 (Total SI 2,60,000) then for the difference in SI amount ie Rs.1,00,000 (2,60,000-1,60,000=1,00,000) fresh waiting periods will be applicable as per the plan offered.

and further contended that they cannot offer the scheme for the same premium of Rs.16,297/- as their insurance policy i.e., life line is priced at Rs.34,851/- and in case the complainant wants to continue with them, for the insurance of “life line” scheme he has to pay that much amount or he can seek suitable insurance company to get the health insurance for himself.

        20.   As stated above, number of correspondence have taken place between the complainant and the OP1.  Under clause 9 of the condition, the insured has to renew the policy without any break to ensure continuity of cover from the commencement.  Under clause 12, in the event of withdrawal of a product, company shall offer a similar alternate product.  Under these clauses the complainant wants the policy to be renewed for the same amount and also to be provided with all the facilities that was available under “Health Forever Scheme” in the “life line” policy scheme also, for which OP is not agreeable i.e., in respect of the premium.  

        21.   When these facts and circumstances are taken into consideration, in particular, clause 12, OP has right to withdraw the insurance product from the market. It is specifically mentioned at clause 12 that “the product/plan may be withdrawn at any time, by giving a notice of three months to the proposer at the address recorded /updated in the policy.  When the policy is withdrawn, the product/plan shall not be available for renewal at the due date. However, the cover under such policy shall continue till the expiry date shown in the schedule of the policy. In the event of withdrawal of a product, company shall offer similar alternative product from its currently marketed products suits.”

        22.   When this being the case, there is no clear mention in the said condition, either by the company or by IRDAI, that, whether the company can enhance the premium for a similar alternative product.  If so, what is the amount of premium that it can enhance.  

23.   In the present case, the complainant was paying premium of Rs.16,297/- for health forever scheme.  The sum assured under the said policy was Rs.4,00,000/- He has also earned Rs.2,60,000/- being the non claim bonus amount.  Now under the Life Line scheme, policy, offered to the complainant, the OP claims that it is all the benefits are similar to in nature and even better in nature and more facilities are offered and hence the premium is Rs.34,851/-

24.   It is also contended that the sum insured offered by them in the earlier policy is higher.  In the present policy, waiting period is also applicable, afresh for the difference in sum insured.  It has also mentioned the various features of the Life Line policy and the “Health Forever Policy”.  Though there may be some advantage and disadvantage of the terms and conditions and facilities offered in Life Line policy over the health forever policy the premium claimed by the OP is astronomically exhorbitant. It is almost more than double the premium amount fixed for the health forever policy. It is to be considered here that the complainant age is 68 years and will not be provided any health insurance policy from any of the insurance companies without there being a medical test and further heavy and hefty insurance premium levied.  The complainant after studying the products available in the market, selected “Health Forever Policy” scheme offered by the OP and continued the same without any break.  As per the clause 12 of the conditions, he is entitled for a similar alternate product from the currently marketed product from OP.  

25.   Under the circumstance, taking into consideration, the financial and economical condition of the complainant, as he is already more than 68 years and naturally his earning capacity has come down, we are of the opinion that considering the viability of the OPs policy and that to the OP is also in the field of business of the insurance, and as it cannot lose money in the insurance business, as everybody’s aim either individually or corporate sector to earn money from the business, we are of the opinion that since the product “Health Forever” has been withdrawn from the market and as the complainant was offered a policy of “Life Line”, if we direct OP1 to collect a sum of Rs.16,297/- being the policy amount every year with 15% extra on the said amount every year as additional premium and to provide the benefits of the ‘Life Line’ policy to the complainant and further the complainant has to pay the said 15% extra amount on every annual renewal of the policy till he continues under the said scheme would meet the ends of justice. Hence we answer point No.1 in the affirmative that there is deficiency in service in not sending the notice of clear 90 days in advance regarding the withdrawal of the policy from the market and further offering a similar alternate policy for a higher premium amount, amounts to unfair trade.  OP2 cannot dissolve itself from its responsibility for saying that no relief is sought against it, and it is only regulatory in function and there is no relationship of consumer and service provider.

26.   Though it is true that it acts as a regulatory authority and no privity of contract between it and the consumer, which permitting the insurance company to take away a product from its stable, it has to protect and preserve the right and interest of the existing policy holder under the scheme which the insurance company wants to withdraw and also to fix the reasonable premium from the new similar alternate policy offered to the existing policy with this observation we answer Point No.2 partly in the affirmative and pass the following;

ORDER

1. Complaint is allowed in part with cost.
2. OP1 is directed to offer the ‘Lifeline’ policy to the complainant from the date of expiry of the policy period of ‘Health Forever’ obtained by the complainant by collecting additional 15% extra on the premium i.e., being collected for health forever policy i.e., Rs.16,297/-, every year and offer the similar facilities that are provided either under the health forever policy or the benefits under life line policy.  The complainant to pay 15% extra premium additionally every year on the premium to be paid and to get it renewed and to have the facilities of the “Health Forever” or “Lifeline” product. 
3. All the other prayer of the complaint is hereby rejected.
4. OP is also directed to pay a sum of Rs.5,000/- towards litigation expenses.
5. The OP is further directed comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this forum within 15 days thereafter.
6. Send a copy of this order to both parties free of cost.

Note:You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 03^RD DAY OF MARCH 2021)

MEMBER                                PRESIDENT

ANNEXURES

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

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the insurance document with terms and conditions

Ex P2: Copy of the Renewal advise

Ex. P3: Copy of the letter written by me

Ex P4: Copy of the letter from customer care

Ex P5:Copy of the letter written by me on May 13^th

Es P6: Email correspondences.

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

RW-1: Sri.Sudhakara H., State Head, Legal and TP claims of OP company

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the Notice for withdrawal

Ex R2: Guidelines on product

MEMBER                                        PRESIDENT