Delhi District Commission Holds United India Insurance Liable For Deficiency In Service Over Failure To Renew Policy, Adjust Excess Premium

The Delhi District Consumer Disputes Redressal Commission-I (North District), comprising a Bench of Divya Jyoti Jaipuriar (President), Ashwani Kumar Mehta (Member) and Harpreet Kaur Charya (Member), has held United India Insurance Co. Ltd. liable for deficiency in service for failing to redress the complainant's grievance and handling the matter negligently.

The Commission directed the insurer to renew the policy retrospectively without any break and to adjust excess premium collected.

Brief Facts

The complainant, Kamal Bhatia, had obtained a Family Medicare (floater) policy from United India Insurance Co. Ltd. in 2013 covering his parents for a sum insured of ₹5 lakh. The policy was continuously renewed till June 2018.

Following the death of his father on 15.12.2016, the complainant requested continuation of the policy in the name of his mother. At the time of renewal in 2017, officials of the insurer advised him to pay the full premium, including the deceased member, assuring that the excess amount would be adjusted later.

Relying on this assurance, the complainant renewed the policy for the 2017–18 period. However, at the time of renewal in 2018, the insurer refused to:

• convert the policy in the mother's name, and

• adjust/refund the excess premium.

Instead, the complainant was asked to opt for a Senior Citizen Individual Policy instead of the existing floater policy.. Despite multiple emails and a legal notice sent on 15-09-2018, the insurer failed to respond. Consequently, the complainant could not renew the policy for 2018–19, resulting in his mother being left without health insurance coverage.

Aggrieved, the complainant approached the Commission alleging deficiency in service and violation of IRDA guidelines.

Contentions of the Opposite Parties

United India Insurance Co. Ltd. contended that the complainant had suppressed material facts and misrepresented the terms of the policy by not placing the complete policy conditions on record. It was argued that the complainant failed to furnish medical records, treatment documents, or proof regarding the cause of death of the deceased insured, and that no post-mortem examination had been conducted.

The Opposite Parties further submitted that the individual and family floater policies were interlinked and, therefore, could not be renewed separately.

Observations & Decision

The Commission held that the Opposite Parties were guilty of deficiency in service, having failed to address the complainant's grievance and having handled the matter in a negligent manner. It observed that despite repeated requests following the death of the complainant's father, the insurer neither renewed nor converted the policy in the name of his mother, nor proportionately reduced the premium.

The Commission further held that the defences raised by the Opposite Parties regarding absence of medical records and post-mortem report were wholly irrelevant, as the dispute pertained to policy renewal and not to any death claim. It also noted that the Opposite Parties had filed a careless “copy-paste” reply from another matter and failed to clarify the inconsistencies during the proceedings.

Accordingly, the Commission allowed the complaint and directed the Opposite Parties to:

• renew the Family Medicare Policy in the name of the complainant's mother with retrospective effect and without any break;

• ensure continuity of benefits and charge proportionate premium, including adjustment/refund of excess premium;

• pay ₹1,00,000 as compensation; and

• pay ₹21,000 as litigation costs.

Case Title: Kamal Bhatia vs United India Insurance Co. Ltd & Ors

CC No.54/2019

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