PER SHRI. S.S. PATIL - HON’BLE MEMBER :

1)        This is the complaint regarding deficiency in service and unfair trade practice adopted by the Opposite Party by unilaterally and arbitrarily increasing the premium for the insurance.

2)        The facts of this case as stated by the Complainants are that the Complainant No.2 had obtained a Mediclaim Insurance Policy from the Opposite Party since 1988 and it has been regularly renewed without any default upto 09/02/2008.  The first mediclaim policy was incepted on 10/02/88 and it was valid form 10/02/88 to 09/02/88.  However, the Opposite Party introduced new terms and conditions in 2007 under the head, mediclaim policy (2007).  As per these terms and conditions the Opposite Party enhanced the premium by 100%.

3)        The Complainant has further stated that –

a)  The premium for the year 2006-2007 was of Rs.10,395/- and the title of the policy was Hospitalization and Domiciliary Hospitalization Benefit Policy

      (Mediclaim Insurance Policy).

b)  For the year 2007-2008, the premium amount was Rs.10,508/-.  The title of the policy being the same.

c)     For the year 2008-09, the premium amount was raised to Rs.22,545/- (more than double premium for the previous year) and the title of the policy was

      also changed as “Hospitalization Benefit Policy (Mediclaim 2007 policy).  Here the words Domiciliary Hospitalization were deleted.   

d)  For the year 2009-2010, the premium amount was Rs.21,357/- with same title of the policy.

e)  For the year 2010-2011, the premium amount was again increased to Rs.45,320/- i.e. again more than double the previous amount under the same title of the policy.

4)        Thus, the Opposite Party has unilaterally and arbitrarily increased the amount of premium.  The Complainant has annexed the copies of insurance policy for the year 2007-08, alongwith terms and conditions.  Policy for the year 2008-2009 alongwith 2007, policy terms and policy for 2010-2011.

5)        The Complainant has further submitted that, he protested the said increase by sending letters dtd.08/02/2010, 18/02/2010, 03/03/2010 and 17/04/2010 to the Opposite Party.  The Complainant also took the matter to IRDA but no relief was given to the Complainant.  The Opposite Party justified the increase by relying on new terms and conditions ignoring the terms and condition before 2007 existing since the inception of the policy (1988).

6)        The Complainant has further submitted that the Opposite Party thus, without consent from the Complainant, arbitrarily introduced new terms and conditions for the period 2008-2009, under Mediclaim 2007 Policy.  These terms and conditions were entirely different from the existing terms and conditions of existing policy before 2007-08.  By this the Opposite Party increased the premium amount. This amounts to deficiency  in service and unfair trade practice.  The Complainant has filed only one proposal and declaration from i.e. dtd.10/02/88 when the policy incepted.  However, there is no document like proposal and declaration form dtd.10/02/88 attached by the Complainant alongwith complaint. However, the Opposite Party has mentioned different dates of proposals & declaration fro every policy. 

7)        The Complainant has further stated that the Opposite Party has loaded the premium by 100%  + 15% co payment in addition to earlier 100% loading on account of claim for hernia operation, when there was no such provision for loading against claims in the earlier policy.

8)        The Complainant has further stated that the cause of action is continuous since the Opposite Party keeps on increasing the premium as per terms and conditions.

9)        The Complainant has prayed that –

            a)  The Opposite Party be directed to refund Rs.57,458/- which are paid by him as illegal increase in the premium amount from 2008-2009 to 2010-2011 with interest.

b)     The Opposite Party be directed to pay Rs.20,000/- for mental anxiety, etc. and cost of this complaint.

10)      The Complainant has attached the xerox copies of the necessary documents in support of his complaint.  The complaint was admitted and notice was served on the Opposite Party.  The Opposite Party filed its written statement  wherein it denied the allegations of deficiency in service and unfair trade practices.  The Opposite Party has come with statement that the Complainant had taken mediclaim policy from Opposite Party on 28/01/2005.  Under Policy No.112800340711000005961 the Complainant had lodged 3 claims for Mrs. J.P. Shah the another insured in the same policy, for Rs.2,72,0004/- (it should have been Rs.2,72,004/-) and the said amount was paid to the Complainant. The Opposite Party has further stated that, pursuant to Policy No.11280034081000006375, the Complainant has lodged 3 claims amounting to Rs.2,64,927/-.

11)      The Opposite Party has further stated that the claim ratio of insured Smt. J.P. Shah was 68%.  Hence, it attracts 100% loading and 15% co pay.  Therefore, the Opposite Party has rightly charged premium at Rs.19,393/-.

            The Opposite Party has submitted that the basic premium amount was Rs.9696.50 and the loading was Rs.9696.50 (Loading due to adverse claim experience with 15% co pay.  

12)      The claim ratio of the Complainant was 66%.  Hence, it attracts 100% loading and 15% co pay.  The basic premium was Rs.12,024/-.  The premium charged was Rs.24,0487 i.e. with 100% loading so the total premium for the policy was charged as RS.19,393/- + Rs.24,048/- = Rs.43,440/- less family discount on basic premium – Rs.2172 = Rs.41,269/- + Service Tax 103% = Rs.4251 = Rs.45520/-.  The Opposite Party has stated that these amounts are calculated as per the rule 7 Regulation laid down by IRDA. The Opposite Party has stated that these premium rules are annexed at Exh. 1.  However, there is no Exh.1 attached to this written statement.    

13)      It is further added by the Opposite Party that, once the insured crosses the age of 70, years, the applicable premium will be loaded by 2.5% per year.

14)      The Opposite Party has submitted that the Complainant No.1 is not entitled to file the complaint on behalf of the Opposite Party No.2.

15)      The Opposite Party has further submitted that it revised the mediclaim policy w.e.f. 16/08/07 and the loading was effective on policy renewed from 16/08/07.  The Opposite Party has denied that the enhancement in premium amount is deficiency in service and unfair trade practice.  Finally it has submitted that the complaint be dismissed with cost.  

16)      Thereafter, the Complainant filed his affidavit of evidence and written argument wherein he reiterated the facts mentioned in his complaint.  The Opposite Party also field its affidavit of evidence and written argument wherein it reiterated the facts mentioned in the written statement.

 17)      We heard the Ld. Representative of the Complainant and the Ld.Advocate for the Opposite Party and our findings are as follows –

            Though the Complainant has stated  in  his  complaint  that  he had obtained the mediclaim policy since 1988, he has not submitted any document to show that he has obtained the policy from 1988. He has attached the Policy No.12800/48/06/20/ 20005494 valid from 10/02/07 to 09/02/2008 received on 31/01/2007.  The previous policy year is mentioned as 2005.  therefore, the contention that he obtained the policy since 1988 is not substantiated by the Complainant.

18)      The premium paid by the Complainant as per the above said policy in the year 2007-2008 (exactly for period 10/02/07 to 09/02/08) was Rs.10,508/-.

19)      The other policy attached to the complaint is bearing No.112800/34/07/11/ 00005961 and the total premium amount is Rs.22,545/- (for the year 2008-2009) and the third policy attached with the complaint is No.112800/34/09/11/00008147 and the premium is Rs.45,520/- (for 2010-2011).  The Complainant has not attached policy document for the year 2009-2010.  However, the Complainant has averred in the complaint that for the policy 2009-2010 he paid premium of Rs.21,357/-.  Thus, it is seen that basically in the year 2007-2008, the premium was Rs.10,508/- but abruptly in the year 2008 the Opposite Party increased it to Rs.22,545/- for 2008-2009 i.e. increased by Rs.12,037/- more than 100%.

20)      For the year 2009-2010 the premium was Rs.21,357/-.  It is also an increase by Rs.10,849/- i.e. more 100% of basic premium.  For the year 2010-2011 again it increased it to Rs.45,520/- i.e. more than 400%.  The increase is (Rs.45,520 – Rs.10,508/-) by Rs.35,012/-.  Thus, from 2009 to 2010, the Complainant had to pay Rs.57,898/- more than what he was supposed to pay.  The explanation given by the Opposite Party for this increase in premium, that, the Complainant has availed the facility of mediclaim to the tune of Rs.2,72,004/- and Rs.2,64,927/- in the previous year.  Therefore, the premium was loaded by 100% + 15%  co pay.  The Opposite Party has submitted that these increase in premium and loading of premium was done by it as per rule 7 of I.R.D.A.  The Opposite Party has specifically stated in written statement  that it has attached the premium rules as Exh.1.  But the Opposite Party has not attached any such rules.  Therefore, we obtained the document “2.20 Insurance Regulatory and Development Authority (Protection of policy holders) interest (IRDA) Regulations 2002 and perused the rules contained therein but we do not find any rule 7 authorizing the Opposite Party or insurer to load the premium or any rule which permits the Opposite Party to load the premium of the insured if he avails the facility of insurance in the previous year.  Thus, the Opposite Party has failed to establish his contention that it is authorized to enhance the premium unilaterally and arbitrarily as it has done in this case.  

21)      In this respect the Complainant has also filed the judgement of this Forum in Complaint No.SMF/MUM/164/2010 in Consumer Welfare Association V/s. The New India Assurance Co. Ltd. in which the issue is the same. In this case also the Insurance Company has increased the amount of premium arbitrarily and unilaterally.  The said complaint was allowed.  The Complainant has also cited the judgement of Hon’ble Supreme Court vide ANR(2001) RD – SC 358 in Biman Krishna Bose V/s. United India Insurance Co. Ltd. in which it is held that “Renewal of Insurance Policy means Repetition of original policy.” “It is the same contract on the same terms and conditions as that of original policy.”              

22)      Therefore, the premium is determined as per the terms and conditions of existing policy. The Opposite Party cannot change the terms and conditions determining the amount of premium which permit the Opposite Party to increase the premium when the insured avails the facility in previous year.  Therefore, taking into consideration the facts and circumstances of this case and the judgement of the Hon’ble Supreme Court as well as order passed by this Forum earlier in Complaint No.164/2010 on 05/08/2011, the Opposite Party has enhanced the premium amount without any authority and thus, there is a deficiency in service on the part of Opposite Party. Not only that the Opposite Party has adopted unfair trade practice by increasing the amount which is detrimental to the interest of the Complainant. Therefore, the Complainants are entitled for the refund of Rs.57,898/- from the Opposite Party as it has loaded the premium without any authority and the Complainant had to pay in excess of what he was supposed to pay as per the terms in the year 2007-2008.

23)      Because of the deficiency in service by the Opposite Party and unfair trade practice adopted by the Opposite Party as explained above, the Complainant No.2 must have sustained mental agony, harassment ad inconvenience due to monetary loss.  Therefore, the Complainant No.2 is also entitled for the compensation for the same and the Opposite Party should be saddled with the compensation of Rs.15,000/-. 

The Complainant No.2 is also entitled for the cost of this complaint.

 24)      In view of the above observations we pass the following order -    

                                                                                                            O R D E R

            1.    Complaint No.249/2010 is partly allowed.

2.         The Opposite Party is directed to refund the sum of Rs.12,037/- (Rs. Twelve Thousand Thirty Seven Only) to the Complainant No.2  collected in excess with interest @ 9% p.a. from 10/02/08 till payment.

3.         The Opposite Party is also directed to refund to the Complainant No.2 an amount of Rs.10,849/- (Rs. Ten Thousand Eight Hundred Forty Nine Only) with interest @ 9% p.a. from 10/02/09 till payment.

4.         The Opposite Party is directed to refund to the Complainant No.2 an amount of Rs.35,012/- (Rs. Thirty Five Thousand Twelve Only)  with interest @ 9% from 10/02/2010 till its payment.

5.         The Opposite Party is directed to pay to the Complainant No.2 an amount of Rs.15,000/- (Rs. Fifteen Thousand Only) as compensation for mental agony, harassment and inconvenience caused to the Complainant due to deficiency in service and unfair trade practice of the Opposite Party.

6.         The Opposite Party is also directed to pay to the Complainant No.2 a sum of Rs.5,000/- (Rs. Five Thousand Only) as the cost of this complaint.

7.         The Opposite Party is also directed to comply with the above said order within 30 days from the date of receipt of this order.

8.    Certified copies of this order be furnished to the parties.