O R D E R
PER SHRI. S.S.PATIL - HON’BLE MEMBER :
1) This is the complaint regarding deficiency in service on the part of Opposite Party.
The facts of the complaint as stated by the Complainant are that the Complainant obtained a Mediclaim Policy in the year 1992 by paying premium on 19/09/1992. The policy was effective from 17/9/92 to 16/09/93. Thereafter, the policy has been renewed every year till date. The present policy bears the number 111800/34/10/11/00009482, valid from 17/09/2010 to 16/09/2011. Till May, 2008 no claim was lodged with the Opposite Party. However, in May, 2008, the Complainant was operated for cataract.
2) As per clause 7 of the policy, for every year, if there is no claim, he was entitled to a no claim bonus which is added to the sum insured.
Clause 7 and 7.1 of the policy stipulates as follows –
7: “Cumulative Bonus : Sum insured under the policy shall be progressively increased by 5% in respect of each claim free year of insurance, subject to maximum accumulation of 10 claim free years of the insurance.”
7.1: “ In case of a claim under policy in respect of insured person who has earned the cumulative bonus, the increased percentage will be reduced by 10% of sum insured at the next renewal. However, basic sum insured will be maintained and wil not be reduced.”
For existing policy holders (as on date of implementation) the accrued amount of benefit of cumulative bonus will be added to the sum insured subject to maximum 10 claim free years.
3) The Complainant has further alleged that, since the 1st insurance policy incepted on 17/09/92 and he has not lodged any claim till 2008 his sum insured alongwith accumulated bonus should have been Rs.4,43,189/-. He has further added that in the year 2003-3004, he increased the original sum insured by Rs.1,10,000/-. Thus, the original sum insured became Rs.3,00,000/- since, 2003-2004. It is the contention of the Complainant that as per the clause 7 and 7.1 of the policy 5% accumulated bonus on this amount of additional insured sum should have been added to the insured amount of Rs.1,10,000/- and the total amount i.e. sum insured + accumulated bonus should have been Rs.1,33,704/-. Thus, total amount would have been Rs.3,09,485/- + 1,33,704/- = 4,43,189/-. However, the Opposite Party has shown accumulated cumulative bonus to the tune of Rs.1,17,000/- only as per policy for year 2007-2008 (17/10/07) i.e. less by Rs.26,189/-.
4) The Complainant has further alleged that the policy for the year 2008-2009 (17/10/08 to 16/10/09) policy dtd.09/09/08 showed cumulative bonus ‘Nil’. Thus, the Opposite Party completely deleted the accumulated bonus in this policy. For this short comings the Complainant served correspondence with the Opposite Party but Opposite Party did not respond to the grievance of the Complainant.
5) Thereafter, the Complainant was admitted in Lilavati Hospital from 29/04/09 to 06/05/09 surgery of his knee operation. For this hospitalization he raised a claim of Rs.4,58,488.41. However, Opposite Party settled the claim of Rs.2,82,488/- only against the claim of Rs.4,58,110.41 and disallowed the claim of Rs.1,75,622.41 vide its letter dtd.31/07/09. The Opposite Party did not allow the above said amount as per clause 2.3 and 2.4 of the policy, or as NP. The Complainant has attached letter dtd.31/07/09 with his complaint.
6) The Complainant has further averred that as per clause 7.1, of the policy dtd.17/09/08 the schedule of the policy should have reflected a total available insurance cover of Rs.4,28,870/- (sum insured + accumulated bonus) but actually it showed insurance cover of Rs.3 Lacs only. Therefore, the Complainant lodged the complaint with Insurance Ombudsman but the Ombudsman also did not agree with the Complainant’s view and disallowed his complaint.
7) The Complainant has also alleged in next para that Opposite Party betrayed the Complainant by introducing, after 16 years a clause prejudicial to the Complainant’s interest without even caring to bring it to his notice. Here the Complainant has failed to mention as which clause the Opposite Party has introduced after 16 years.
8) It is further alleged by the Complainant that the Opposite Party cannot withdraw the earned cumulative bonus as per its whim. Thus, the Complainant has been deprived of the bonus earned during 16 years.
9) The Complainant has further stated that on one hand the Opposite Party withdrew the cumulative bonus while in the same year it increased the premium to Rs.32,102/- from Rs.17,102/-. Thus, the Complainant has vehemently alleges the deficiency in service against the Opposite Party and prayed for a payment of Rs.3,61,295/- with interest.
The Complainant has attached the xerox copies of the following documents with the complaint.
a) copy of Bank Pass Book.
b) Terms & conditions of policy dtd.01/09/96.
c) Policy documents dtd.17/10/07 & 09/09/08.
d) Letters dtd.10/12/08, 26/03/09.
e) Claim settlement advice dtd.31/07/09.
f) Mediclaim computation dtd.25/06/09.
g) Terms & conditions of policy (2007).
h) Letter dtd.06/08/09.
i) Mediclaim computation 14/12/09.
j) Letters dtd.21/01/2010, 20/03/2010.
k) Order of Ombudsman dtd.09/12/2010.
l) Letters dtd.25/02/2011, 28/02/2011, 03/05/2011, 28/06/2011.
m) Particulars of claim.
10) The notice of the complaint was served on the Opposite Party. Opposite Party appeared before this Forum and filed its written statement wherein it denied the allegation of deficiency and unfair trade practice. The Opposite Party has specifically stated that the first policy of the Complainant is from the year 1997 and not from 1992. The Opposite Party has further admitted that in May, 2008 the Complainant was operated for cataract and he raised the claim for expenses on account of this operation. This claim was covered under policy for year 2007-2008.
11) The Opposite Party has further referred clause 7.1 of the policy and averred that as per this clause the basic sum is maintained but the cumulative bonus will be maintained separately and will not be added to the sum insured. However, cumulative bonus shown separately would be disbursed if the claim of the Complainant exceeds the sum insured. Hence, the cumulative bonus is mentioned separately in the column and cannot be added to the sum insured.
12) The Opposite Party has denied that the Complainant had protested when Policy No.11100/34/07/11/00010132 dtd.17/10/07 was issued. The Complainant has not adduced any evidence to prove that the Complainant had protested when the said policy was issued.
13) The Opposite Party has further clarified in respect of para 5 of the complaint that the policy for the period 17/09/08 to 16/09/09, dtd.09/09/08 shows 0 (zero) cumulative bonus because the Complainant had raised the claim and received the claim amount under the previous policy bearing No.111800/34/07/11/00010132 for cataract operation. As per clause 8 of the said mediclaim policy which was accepted by the Complainant in Sept., 2007, “the sum insured under the policy shall be increased by 5% of each renewal in respect of each claim free year of insurance cumulative subject to maximum 30%. In case of a claim the cumulative bonus earned shall be withdrawn on renewal of the policy. Cumulative bonus will be lost if policy is not renewed on the date of expiry. In case, sum insured under the policy is reduced at the time of renewal, the applicable cumulative bonus shall also be reduced in proportion to the sum insured. In view of this provision of clause 8 of the policy, policy for period 2008-2009 showed cumulative bonus ‘Zero’ as the Complainant had raised & received the mediclaim during previous Policy 111800/34/07/11/00010132 for cataract operation.
14) The Opposite Party also denied that the Complainant has taken up the matter of cumulative bonus to Opposite Party and sent letters reminders to it and the Opposite Party has not responded to the same.
15) Regarding the claim raised by the Complainant for his hospitalization in April – May, 2009, the Opposite Party has explained that, the claim has been settled by the Opposite Party as per the terms and conditions of the policy. The reason for deduction was clearly mentioned in the mediclaim computation sheet. Thus deductions were done as per terms and conditions of the policy.
16) The Opposite Party has further pointed out that the Complainant has wrongly interpreted the policy clauses. Therefore, even the Insurance Ombudsman has rejected the complaint of the Complainant.
17) The Opposite Party has further vehemently denied that it introduced amendments on the belief that a past policy has no bearing on renewed policy. It is further clarified by the Opposite Party that the Complainant has already accepted the terms and conditions of the policy for the year 2007-2008. The Complainant did not make any grievance about the said terms and conditions. Hence, he is now estopped from raising the above said issue of terms and conditions.
18) The Opposite Party has also pointed out that the Complainant has failed to establish his claim of deficiency in service against the Opposite Party. The complaint is misconceived, fabricated, false and hopelessly time barred. Hence, it should be dismissed with cost.
19) The Complainant has filed his affidavit in evidence and written argument wherein he reiterated the facts and points mentioned in his complaint. The Opposite Party filed affidavit in evidence and written argument wherein it reiterated the facts and points mentioned in its written statement. In addition to the written argument of the Complainant the Ld.Advocate for the Complainant also filed the copy of order of this Forum dtd.20/01/2012 in Mr. Anil Rajgarhia V/s. Oriental Insurance Co. Ltd. and requested to consider this case.
20) We heard the Ld.Advocate for the Complainant and perused all the papers filed by both the parties and our findings are as follows –
21) The Complainant has alleged that he has obtained a mediclaim policy since 1992. However, in support of this averment, the Complainant has not filed the policy document or a premium receipt for this policy. He has only filed a statement of account of his bank pass book in which a debit entry is shown. The Complainant has also failed to adduce evidence of having further mediclaim policies from 1993 to 1996. Even he has admitted before the Ombudsman that he was having mediclaim policy from 1997. The schedule of policy fro 2007-2008 and 2008-2009, the only policy documents filed by the Complainant bears the contention as “Date of issuance of 1st policy : 17/09/1997. Therefore, the averment of the Complainant that he was holding mediclaim policy since 1992 does not hold water and cannot be accepted only on perusing a debit entry in his pass book.
22) Therefore, there is evidence to show that the Complainant was taking a mediclaim policies every year since September, 1997. Even then the Complainant has not brought on record the policy documents from 1997 to 2006. The Complainant has filed the 1st policy document valid from 17/09/07 to 16/09/08, showing sum insured as Rs.1,90,000 + 1,10,000/- and cum Bonus Rs.95,000 + Rs.22,000/-.
23) The Complainant has also filed a policy document for the period from 17/09/08 to 16/09/09 showing sum insured Rs.1,90,000/- + 1,10,000/- and cum Bonus – Zero. The receipt date is 08/09/08. It is also seen that no claim was lodged by the Complainant till May, 2008. In May, 2008, he had lodged two claims for cataract operation.
24) The Complainant has filed terms and conditions 01/09/1996 at Exh.‘B’ to his complaint, however, he has not shown that he was having mediclaim policy for this period though he has only pleaded that he was having mediclaim policies since 1992. Even he has not filed the terms and conditions for the year 1997-1998 till 2006. As per the terms and conditions of the mediclaim policy Term 7.1, if the policy is discontinued or the previous policy is not renewed on the date of its expiry the insured person loses all the benefits or advantages of his previous policies in the future. In this case even if it is assumed that the Complainant was having a policy since 1992 – 1993, then he should have produced the proof that he was also having the mediclaim policies since 1993 till September, 1997 without any break. Unfortunately, the Complainant is not having any document in this respect.
25) The Complainant has produced terms and conditions of the year 1996. As per these terms and conditions, condition 7 and 7.1 run as follows -
7: “The sum insured under the policy shall be progressively increased by 5% in respect of each claim free year of insurance subject to maximum accumulation of 10 claim free years of insurance.”
7.1 “In case of claim under the policy in respect of insured person who has earned the cumulative bonus, the increased percentage will be reduced by 10% of sum insured at next renewal. However, basic sum insured will be maintained and will not be reduced.”
“N.B. 1) For existing policy holders (as on date of implementation) the accrued amount of benefit of cumulative bonus will be added to the sum insured subject to maximum 10 claim free years.
2) Cumulative bonus will be lost if policy is not renewed on the date of expiry.”
26) As per the above stated terms and conditions of the policy (1996), and as per the contention of the Complainant in his complaint para 4, the total sum insured must have been shown Rs.4,43,189/- in the mediclaim policy for the year 2007-2008. However, the Opposite Party has shown in this policy Rs.3,00,000/- as sum insured and Rs.1,17,000/- as accumulated cumulative bonus.
27) It is also alleged by the Complainant that next year policy (bearing No.11800/34/08/11/00009126 dtd.09/09/08 was issued to him for the period from 17/09/08 to 16/09/09. But, the Complainant was shocked to find that the cumulative bonus was completely deleted from this policy. It was shown as zero. The main allegation and deficiency alleged by the Complainant is that the Opposite Party has not shown the correct amount of accumulated cumulative bonus in the policy document and the said accumulated cumulative bonus was reduced to zero in the policy for year 2008-2009.
28) In this respect, it has been observed that there is no dispute about the fact that the Complainant was having mediclaim policy since 1997 as admitted by the Opposite Party and observed by the Ombudsman also. The Complainant has produced terms and conditions of 1996, which govern the mediclaim policies since 01/09/1996. Therefore, the Complainant is governed by these terms and conditions of the mediclaim insurance policy. As per term 7 of the policy “sum insured under the policy shall be progressively increased by 5% in respect of each claim free year of insurance, subject to maximum accumulation of 10 claim free years of insurance.
29) In the instant case the sum insured in 1997 is Rs.1,90,000/-. The Complainant has claim free years of insurance till May, 2008 (10 years). Therefore, Opposite Party should have progressively increased the sum insured (Rs.1,90,000/-) by 5% till May, 2008. The Opposite Party has separately shown the cum bonus accrued as Rs.95,000/-But this is not a ‘progressively’ increase but a simple increase. The Opposite Party has not interpreted the word ‘progressively’ and calculated the sum for his benefits. The Complainant has properly calculated the amount of cum bonus as per clause 7 and the correct amount accumulated at the end of 10 years i.e. Rs.1,19,485/-. But even the Complainant has not shown this amount separately it is added in the original sum insured of Rs.1,90,000/- and then shown as total amount as Rs.3,09,485/-. This is also wrong on the part of Complainant. The correct way of calculating the sum insured and accumulated cum bonus is to show these two amounts separately. Therefore, as per the correct interpretation of clause 7, at the end of claim free 10th year the correct position of the sum insured would have been as follow -
Sum Insured : Rs.1,90,000/- cum bonus Rs,1,19,485/-.
Meanwhile, the Complainant has increased the sum insured by Rs.1,10,000/- in the year 2003. Therefore, at the end of 4th year i.e. in the beginning of insurance policy on 17/09/07, the sum insured was shown as Rs.1,10,000/- and the cum bonus should have been shown as Rs.23,704/- and not Rs.22,000/- as shown by the Opposite Party.
30) Therefore, from these practices adopted by the Opposite Party it is clear that Opposite Party has adopted unfair trade practices while calculating the cum bonus for its benefit and causing losses to the consumer. The Opposite Party has shown Rs.26,189/- less bonus accrued at the end of 10 claim free years (As on 17/09/07).
31) We have minutely scrutinized the documents filed by both the parties and it is seen that the Opposite Party has unilaterally changed the terms & conditions of mediclaim policy in the year 2007 without informing the Complainant and without obtaining his consent to the modification, alterations in the terms and conditions. Particularly it is objectionable when these changes are affecting the benefits of the consumer and unilaterally causing the loss to the consumer by withdrawing the long earned benefits of cumulative bonus. Therefore, it is a crystal clear deficiency in service on the part of Opposite Party. By adopting such deficient practice, the Opposite Party caused a total loss of cumulative bonus of Rs.1,43,189/- to the Complainant by deleting the bonus in the policy for the year 2008-2009 under the cover of clause of the renewed terms and conditions.
32) In these circumstances, it is worth to note that a contract of insurance is a contract of utmost good faith. One party can not effect changes in the conditions and terms unilaterally by keeping the other side in dark. The changes so effected are not binding on the counter part of such benevolent contract of insurance which is meant to indemnify the counter part in his bad days of ill health.
33) Despite the above observations it is also noted that the Complainant has availed the claim facility in the validity of mediclaim policy of 2007-2008 for his cataract operation (Policy valid from 17/09/07 to 16/09/08). In view of this fact clause 7.1 of the policy (01/09/1996) comes into force. As per this clause, “In case of a claim under the policy in respect of insured person who has earned the cumulative bonus, the increased percentage will be reduced by 10% of sum insured at the next renewal. However, basic sum insured will be maintained and will not be reduced.”
34) As per this provision, the Complainant has claimed mediclaim insurance in May, 2008. Before, that he had earned a cumulative bonus to the tune of Rs.1,43,189/-. So this amount will be reduced by 10% of the sum insured. The sum insured at relevant time was Rs.3,00,000/-. Therefore, the 10% of this amount would have been Rs.30,000/-. So as per the said provision the increased amount i.e. 1,43,189/- should have been reduced to Rs.1,43,189/- Rs.30,000/-) = Rs.1,13,189/- and should have been displayed in the policy schedule dtd.17/09/08 to 16/09/09. Policy No.111800/34/ 08/11/00009126. But the Opposite Party has shown the cumulative bonus as zero in this policy. For the purpose of reimbursing the hospitalization expenses for the period 17/09/08 to 17/09/09, the insured amount available to the Opposite Party and the Complainant as on 17/09/08 was Rs.3,00,000/- + Rs.1,13,189/- = Rs.4,13,189/-.
35) From the papers it is seen that in the aforesaid relevant period the Complainant was hospitalized for his (R) knee operation and incurred expenses of Rs.4,58,110.41. He sent the claim of this amount to the Opposite Party but Opposite Party has settled the claim on two different occasions to the tune of Rs.3,00,000/-. As per the terms 7 and 7.1 of old terms & conditions the Opposite Party should have settled the claim of Rs.4,13,189/- as stated above as the amount available to Opposite Party as per mediclaim policy was Rs.3 Lacs + accumulated cumulative bonus Rs.1,13,189/-. Therefore, in our candid view the Opposite Party paid less amount of Rs.1,13,189/- by adopting unfair trade practices and being deficient in its service. So this amounts needs to be reimbursed to the Complainant with interest from 31/07/2009 with interest @ 9% till its payment.
36) As observed earlier it is clear that the Opposite Party has adopted unfair trade practices in computing the cumulative bonus as well as in modifying the terms and conditions without the knowledge of the Complainant and without his consent. Therefore, the Complainant deserves for compensation for mental agony physical harassment and inconvenience caused to him because of the above said ill practices of the Opposite Party, at the old age of 80 years and above. The Complainant also deserves for the cost of this complaint.
In view of the above observation we pass the order as follows –
O R D E R
1. Complaint No.242/2011 is partly allowed.
2. The Opposite Party is directed to reimburse to the Complainant the expenses of Rs.1,13,189/-(Rs.One Lac Thirteen Thousand One Hundred Eighteen Nine Only) with interest @ 9& p.a. from 31/07/2009 till its payment.
3. The Opposite Party is also directed to pay a compensation of Rs.25,000/- (Rs.Twenty Five Thousand Only) to the Complainant towards to mental agony, physical harassment and inconvenience caused to the Complainant because of unfair trade practices by the Opposite Party as well as deficiency in service by disallowing the part payment of the medical bill.
4. The Opposite Party is also directed to pay Rs.5,000/-(Rs.Five Thousand Only) to the Complainant towards the cost of this complaint.
5. Opposite Part is directed to comply with the above said order within 30 days from the receipt of copy of this order.
6. Certified copies of this order be furnished to the parties.
