[Discontinuation Of Insurance Policy] Delhi HC Directs Insurer To Provide Similar Alternative Insurance Plan Having Similar Coverage & Same Premium [Read Order]

"The grievance of the petitioner is that they have taken a health insurance policy from respondent No. 1 in 2006 and has been regularly paying the premium year after year. Suddenly in 2019, respondent No. 1 refused to renew the policy on the ground that the policy in question is no longer given by respondent No.1.

Let respondent No. 1 consider offering to the petitioner an alternate medical insurance policy with approximately the same coverage and the same premium before the next date of hearing," the Court ordered.

The Bench of Justice Jayant Nath was hearing a civil writ petition filed by one Lokesh Chandra and his wife trough Advocate Anant Misra, against the National Insurance Company.

It was their case that they had taken an insurance plan from the said company in the name of Baroda health policy in the year 2007 and had been successfully paying the premium of about Rs. 10,000 till the year 2019.

However, in 2019, the Company discontinued the Baroda health plan, and in the alternative offered an alternative plan with a premium of Rs. 50,000.

The Petitioners had argued that the company arbitrarily discontinued their plan without any prior notice and asked them to take up a new insurance plan having the premium amount of about 8 times higher than existing one.

"The insurance company can only load/increase the premium upto some reasonable extent and not with the object of making the renewal of insurance policy impossible," they submitted.

It was further argued that the respondents are bound to renew the policy on the same terms and conditions as mentioned in the earlier policy.

"Renewal means repetition of original policy and the renewed policy is extended and renewed on the identical terms by different date. By renewal, that policy is revived and is the substitution of obligation under the old policy and the contract remains on the same terms and conditions as that of an original policy, and with effect from the date it fell due for its renewal as has been held by Apex Court in a judgement titled Biman Kumar Bose vs. United India Insurance Company Limited MANU/SC/0948/2001. By refusing to renew, insurance company is seeking to deprive the petitioners of their vested rights, which cannot be permitted in law," the plea stated.

The High Court has issued notice on the petition and has asked the Respondent to file a Counter-affidavit within three weeks.

The matter is now listed for hearing on October 21, 2020.

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