Kerala

Idukki

CC/142/2020

Sebastain chako - Complainant(s)

Versus

star health and allied insurance co - Opp.Party(s)

Adv:lissy mm

29 Nov 2022

ORDER

DATE OF FILING : 21.10.2020

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the    29^th   day of November, 2022

Present :

SRI. C. SURESHKUMAR                   PRESIDENT

SMT. ASAMOL P.                               MEMBER

SRI. AMPADY K.S.                            MEMBER

CC NO.142/2020

Between

Complainant                                            :   Sebastian, S/o. Chacko,

                                                                      Mukalel House,

                                                                      Bison Valley P.O.,

                                                                      Societymedu, Munnar.

          (By Adv: Lissy M.M.)

And

Opposite Parties                                       : 1. The Manager,

                                                                      Star Health and Allied Insurance

Company Ltd.,

                                                                      Regd. & Corporate Office – 1,

                                                                      New Tank Street,

Valluvar Kottam High Road,

Nungambakkam, Chennai – 600 034.

                                                                  2. The Branch Manager,

                                                                      Star Health and Allied Insurance

                                                                                          Company Ltd.,

                                                                      Branch Office – Perumbavoor,

                                                                      1^st Floor, Darsanam Chamber, VI/372 B(3),

                                                                      M.C. Road, Perumbavoor,

                                                                      Ernakulam – 683 542.

      3. Jincy Paulose,

                                                                      Malikudy House,

                                                                      Adimali P.O.

 (All by Adv: K. Pradeepkumar)

 

O R D E R

SRI. C. SURESHKUMAR, PRESIDENT

 

1. This is a complaint filed under Section 35 of Consumer Protection Act, 2019 (the Act, for short).  Complaint averments are briefly discussed here under :

 

Complainant is a resident of Bison Valley, Munnar.  1^st and 2^nd opposite parties are Manager and Branch Manager of Star Health and Allied Insurance Company Ltd. having its office at Chennai and branch at Perumbavoor respectively.  3^rd opposite party is an agent working under opposite parties 1 and 2, who canvasses for policies.                                                                                                                                 (cont…2)

• 2  -

Complainant was holding insurance policy issued by the company represented by opposite parties.  In 2014, this policy was converted to mediclaim policy.  Complainant had agreed for conversion as he was made to believe by opposite parties that such conversion will be more beneficial, for which he had to pay a premium of Rs.10,887/-.  While so, when complainant became 65 years old, opposite parties had, without any intimation, collected Rs.5,043/- in excess of premium amount.  Opposite parties had explained that complainant will have to pay more premium upon attaining 65 years of age.  There is no such condition in the policy.  Thereafter, on 4.6.2020, opposite parties had again collected Rs.3,449/- in excess, from complainant.  They had explained that excess amount was charged since there was a hike in hospital charges.  Opposite parties had no right to collect excess amount than the initial premium fixed as per policy conditions.  Collection of excess amount towards premium is unfair trade practice.  Hence complainant prays for return of Rs.10,086/- collected towards excess premium charges and Rs.3,449/- collected as excess in 2020.  He seeks a compensation of Rs.1 lakh for  unfair trade practice on the part of opposite parties which amounts to deficiency in service and litigation costs of Rs.5,000/-.  Complainant had also sought for a direction against opposite parties  restraining from collecting excess amount apart from the premium from complainant. 

 

2. Opposite parties have filed a joint written version.  Their contentions are briefly discussed here under :

 

According to them, complaint is not maintainable in law or upon facts.  There was no deficiency in service from the side of opposite parties and hence there is no cause of action for complaint.  A complaint relating to price escalation is not entertainable before Consumer Fora and hence not maintainable.  Pricing in insurance business means the premium which is payable as consideration for every policy approved by the IRDA.  Complainant had availed a mediclassic health insurance individual policy issued by opposite parties for the period between 5.6.2014 to 4.6.2015, both dates inclusive.  This insurance coverage was renewed upto 4.6.2021 for a sum assured of Rs.2 lakhs.  Policy covers hospitalization expenses incurred in India, subject to conditions, definitions and exclusions mentioned therein.  Complainant had initially taken policy when he was 61 years old.  At that time premium amount payable by him was Rs.9,550/- excluding tax and this premium rate was continued until he attained 65 years of age.  During 6^th year renewal time, complainant’s age was above 66 years.  Premium amount was fixed on the basis of age slab, details of which  are as hereunder :

 

5 months – 35 years         -  Rs.2880/-

36 years  -  45 years         -  Rs.3175/-

46 years  -  50 years         -  Rs.4775/-

51 years  -  55 years         -  Rs.5900/-

56 years  -  60 years         -  Rs.7350/-

                                                                                                                        (cont…3)

• 3  -

 

61 years  -  65 years         -  Rs.9550/-

66 years  -  70 years         -  Rs.13500/-

71 years  -  75 years         -  Rs.16950/-

76 years  -  80 years         -  Rs.22000/-

Above 80 years                -  Rs.28600/-

 

 

Complainant was above 65 years of age, premium as per premium chart was Rs.15,930/- (Rs.13500/- +  Rs.2430/-).  Opposite parties had informed complainant about difference in premium vide renewal notice dated 6.4.2019.  After understanding the terms and conditions of policy, complainant had then remitted the premium amount of Rs.15,930/- in time.  Opposite parties had then issued a policy with continuity benefits. Company represented by opposite parties is registered under Companies Act of 1956 and is controlled and regulated by the Insurance Regulatory and Development Authority of India (IRDAI) formed under IRDAI Act of 1999 by Government of India.  Opposite parties are licensed by IRDA vide registration No.129.  If there is a violation of IRDA guidelines by the company, it is liable to be penalized which includes suspension of its business activities.  Mediclassic health insurance individual product was revised from 1.11.2019 and its terms and conditions along with rates came into effect from 1.11.2019 in respect of fresh policies and for renewals from 1.2.2020.  Revision in the increase of premium rates and other changes have been approved by IRDA of India.  As per IRDAI (Health Insurance) regulations 2013 any subsequent revision or modification in policy which is approved by authority shall be notified to each policy holder at least 3 months prior to the date when such revision or modification comes into effect.  The notice shall set out the reason for such revision or modification, in particular, the reason for increase in premium and quantum of such increase. 

 

          At the time of renewal of policy for 2020 – 21, opposite parties had sent such a notice dated 12.2.2020 to complainant stating revised terms and conditions of policy.  This notice was sent 3 months in advance in accordance with the provisions of Act.  Insured was informed that the policy has been revised with modified coverage, change in premium rates and also that the revised product has two variants, namely, standard and gold.  Revision was approved by IRDAI on 1.11.2019.  Revision in premium for 2020 – 21 (7^th year policy) was calculated as per revised mediclassic health insurance policy conditions and its renewal premium was Rs.19,379/-.  As per renewal notice dated 27.4.2020, complainant was informed about revised changes.  Complainant had paid revised premium of Rs.19,379/- on 4.6.2020 after understanding the terms and conditions of policy, especially the renewal terms.  Upon receipt of premium, policy was renewed on 5.6.2020 with continuity benefits.  Complainant had not objected to the hike in  premium rates on these occasions. 

 

                                                                                                                        (cont…4)

• 4  -

          Insured has no vested right to insist that the old product must be continuously offered at the same pricing even when insurer had ceased to market such products.  It is a simple business and commercial decision of insurer to discontinue old insurance policies and to come up with new enhanced ones with revised cover.  There is no scope for any deficiency in service allegations to sustain this complaint.  No health insurance product can be marketed by any insurer unless it has prior clearance of the IRDA as per File and Use Procedure.  Health insurance policy is an annual contract.  Risk for the period of one year was accepted by insurer on 7^th occasion for which insured had paid the premium.  Premium for the period for which insurance company has been on risk is  non-refundable.  There is no provision for refund of lapsed policy.  It is incorrect to say that opposite parties had collected Rs.3,449/- under the premises that hospitalization expenses have escalated.  On 1.11.2019, policy was revised as per approval of IRDAI.  Additional benefits were included and premium was increased.  On 12.2.2020, opposite party had sent notice to complainant informing him about revised terms and conditions of policy.  This complaint has been filed vexatiously with the intention of getting unlawful enrichment from opposite parties.  Hence opposite parties pray for dismissal of the complaint with compensatory costs.

 

          3.  After affording sufficient opportunity to both sides for steps, case was posted for evidence.  No oral evidence was tendered by both sides.  Ext.P1 and P2 series 3 in numbers were marked on the side of complainant and Exts.R1 to R6 were marked on the side of opposite parties without formal proof. 

 

          Ext.P1 is mediclassic insurance policy with schedule taken by complainant from 5.6.2020 to mid night of 4.6.2021.  Total premium collected including GST, Flood Cess and Stamp Duty is Rs.19379/-.  Ext.P2 series 3 in numbers are receipts with regard to premium payments.

 

          Ext.R1 is copy of policy issued upon renewal after payment of Rs.15,930/- as premium.  Period covered is from 5.6.2019 till mid night of 4.6.2020.  Ext.R2 is copy of tax invoice for payment of premium of Ext.R1.  Ext.R3 is renewal notice issued dated 6.4.2019 corresponding to the revision of policy on 1.11.2019.  Ext.R4 is notice with regard to revision of policy terms and conditions issued to complainant dated 12.2.2020.  Ext.R5 is copy of intimation sent by IRDAI to the Chairman cum Managing Director of Star Health and Allied Insurance Company Ltd., dated 30.9.2019, approving the revision of Mediclassic Insurance Policy (Individual).  Ext.R6 is photocopy of driving licence apparently of the complainant.  After marking documents, evidence was closed.  Both sides were heard.  Now the points which arise for consideration are :

1)  Whether there was any deficiency in service or unfair trade practice from the side of opposite parties ?

2)  Whether complainant is entitled for the reliefs prayed for ?

3)  Final order and costs ?

                                                                                                                        (cont…5)

- 5  -

4.  Point Nos.1 and 2 are considered together :

 

          The only grievance of the complainant is charging of enhanced rate of premium for renewal of policies and collection of a sum of Rs.3,449/- in 2020.  Opposite parties have contended that policy terms were revised in accordance with the guidelines issued by IRDAI.  Since premium is calculated on  age slab basis, as mentioned in the written version, it is liable to increase with the advancement of age of complainant.  Rs.3,449/- was collected towards increase in premium rate since policy terms and conditions were revised in accordance with IRDAI guidelines.  Prior to it, notice was issued to complainant dated 12.2.2020 stating the revised terms and conditions.

 

          Admittedly, policy is liable to be renewed annually which the complainant ought to have renewed on the basis of terms proposed by the insurance company, only if those were acceptable to him.  Complainant does not have a case that there is no specific violation of guidelines issued by IRDAI with regard to change in policy conditions including premium rates.  Under the circumstances in the absence of any evidence with regard to violation of guidelines of IRDAI by opposite party, it cannot be said that excess amount collected towards revised premium rates is unauthorized or illegal.  Therefore, we are of the view that charging of such excess rate will not amount to any deficiency in service or unfair trade practice.  Consequentially, we also find that reliefs prayed for are not to be granted.  Point Nos.1 and 2 are answered accordingly. 

 

5.  Point No.3 :

 

          In the result, this complaint is dismissed, under the circumstances, without costs.  Extra copies filed by parties shall be taken back by them, without delay.

 

                    Pronounced by this Commission on this the  29^th  day of November, 2022

 

         

 

    SRI. C. SURESHKUMAR, PRESIDENT

 

 

           SMT. ASAMOL P., MEMBER

 

 

SRI. AMPADY K.S., MEMBER

 

 

 

 

                              (cont...6)

 

• 6  -

 

APPENDIX

 

Depositions :

Nil.

Exhibits :

On the side of the Complainant :

Ext.P1            -  Mediclassic insurance policy with schedule taken by complainant from

                         5.6.2020 to mid night of 4.6.2021. 

Ext.P2 series -  Receipts with regard to premium payments - 3 in numbers.

On the side of the Opposite Party :

Ext.R1  -  Copy of policy issued upon renewal after payment of Rs.15,930/- as premium. 

Ext.R2  -  Copy of tax invoice for payment of premium of Ext.R1. 

Ext.R3  -  Renewal notice issued dated 6.4.2019 corresponding to the revision of policy

      on 1.11.2019. 

Ext.R4  -  Notice with regard to revision of policy terms and conditions issued to

                 complainant dated 12.2.2020. 

Ext.R5   - Copy of intimation sent by IRDAI to the Chairman cum Managing Director of

                 Star Health and Allied Insurance Company Ltd., dated 30.9.2019.

Ext.R6  -  Photocopy of driving licence  apparently of the complainant.