Ahmedabad District Commission Holds Iffco Tokio General Insurance Co. Liable For Wrongful Repudiation Of Valid Claim

Brief Facts:

Mr. Amrutlal Thakkar (“Complainant”) availed a 'Corona Kavach' policy issued by Iffco Tokio General Insurance Co. Ltd. (“Insurance Company”), with a sum assured of Rs. 5 Lakh. In 2021, the Complainant underwent a treatment for COVID-19 at Aartham Hospital (“Hospital”), with an expenditure of Rs. 2,01,512/-. Subsequently, he submitted a claim with the Insurance Company via a third-party administrator. However, the Insurance Company only disbursed Rs. 1,55,378/- and deducted the remaining amount without a valid cause.

Feeling aggrieved, the Complainant filed a consumer complaint before the Additional District Consumer Disputes Redressal Commission, Ahmedabad, Gujarat (“District Commission”) against the Insurance Company and the Hospital. In response, the Insurance Company contended that the amount paid was legally admissible as per the terms of the policy and applicable 'Ayushman Maharashtra' circulars (“AMC Guidelines”). The balance claim of Rs. 46,134/- was outside the approved package rates and policy terms. On the other hand, the Hospital argued that it levied the charges based on the AMC Guidelines, without demanding any excess amount.

Observations by the District Commission:

The District Commission observed that the Complainant took treatment for COVID-19 at the Hospital and submitted a valid claim before the Insurance Company. However, part of the claim was arbitrarily deducted by the Insurance Company citing AMC guidelines. The District Commission held that such a deduction was unjustified, as the AMC guidelines were not intended to override the terms of the policy. It held that the purpose of the AMC guidelines is to ensure affordable treatment for economically weaker sections who did not have insurance coverage. Further, the guidelines were not meant to permit insurance companies to deny legitimate claims of policyholders.

Based on the aforementioned observations, the District Commission directed the Insurance Company to pay the remaining Rs. 46,134/-, along with Rs. 3,000/- as compensation and Rs. 2,000/- as legal costs to the Complainant. The complaint against the Hospital was dismissed as the contractual obligation was solely with the Insurance Company.

Case Title: Amrutlal T. Thakkar vs Iffco Tokio General Insurance Co. Ltd. and Anr.

Case Number: Consumer Complaint No. 1624 of 2021

Advocate for the Complainant: M. K. Dudhiya

Advocate for the Respondent: R. P. Raval and S. M. Shah

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