Laws laid down by supreme court
LAW LAID DOWN ON MEDICLAIM- INSURANCE BY APEX COURT
LAW LAID DOWN ON MEDICLAIM-
INSURANCE BY APEX COURT
PART A
A.
INSURANCE
COMPANIES USE TRICKY LANGUAGE AND DEFEAT THE PURPOSE OF POLICY.
Apex
National Commission allowed the mediclaim of the
complainant for operation during the first year of the policy as there was
no evidence about the awareness of the patient about the symptoms of the
disease or having got treatment for the same. Most of the people are totally
unaware of the symptoms of the disease they suffer till it is diagnosed and
some medicines referred to be taken. Under such situations, they cannot be held
liable as held by Supreme Court in number of cases earlier also. Not only this,
Harjot
Kour V National Insurance Company 2010 CTJ 168,[National commission.]
B.
MEDICLAIM
CHARGES IN THE PRIVATE HOSPITALS
Private
hospitals were charging higher rates from patients with mediclaim policies
compared to those who did not have any health insurance cover for the same
treatment. The controller and auditor General of
India [CAG] in a recent report pinpointed this fact
In an
interview with Mail Today, a senior doctor at the All India institute of
medical sciences (AIIMS) said that the huge charges of private hospitals,
especially for those having a health insurance cover has contributed to the
adverse claim ratio of insurance companies and consequently increases in
premiums.
The
controller and auditor General of India [CAG] in a recent report
C.
PRE-EXISTING
DISEASE AND OTHER EXCLUSION CLAUSES
Mithoolal Nayak Vs. Life
Insurance Corporation of India (AIR 1962 SC 814), in which
the position of law was stated thus: The three conditions for the application
of the second part of s. 45 are:
(a) the statement
must be on a material matter or must suppress facts which it was material to
disclose ;
(b) the supression
must be fraudulently made by the policy holder; and
(c) the policy holder must have known at
the time of making the statement that it was false or that it suppressed facts
which it was material to disclose.
Mithoolal Nayak Vs.
Life Insurance Corporation of India (AIR 1962 SC 814),
New
India Insurance Company V Anand Gourana reported in CTJ 2010 the Madhya Pradesh State Commission
The insurance companies are
repudiating even genuine mediclaims taking advantage of their exclusion clause. In yet another recent case New India
Insurance Company V Anand Gourana
reported in CTJ 2010 the Madhya Pradesh State Commission rejected the plea of insurance company that the charges
incurred at hospital or nursing home primarily for diagnosis, X-ray or laboratory examination are not
reimbursable.
Life
Insurance Corporation of India vs. Smt.G.M.Channabasamma (1991) (1) SCC 357,
It is
well settled that a contract of insurance is contract uberrima fides and there
must be complete
good faith on the part of the assured. The assured is thus under a solemn
obligation to make full disclosure of material facts which may be relevant for
the insurer to take into account while deciding whether the proposal should be
accepted or not. While making a disclosure of the relevant facts, the duty of
the insured to state them correctly cannot be diluted. Section 45 of the Act
has made special provisions for a life insurance policy if it is called in
question by the insurer after the expiry of two years from the date on which it
was effected.
Authorities
in-charge of management of the affairs of the Corporation should bear in mind
that its credibility and reputation depend on its prompt and efficient service.
Therefore, the approach of the Corporation in the matter of repudiation of a
policy admittedly issued by it should be one of extreme care and caution. It
should not be dealt with in a mechanical and routine manner.
D.
CLAIM NOT TENABLE ;
Recently
insurance companies short listed some of the hospitals from their panel and
objected to their prescribing a number of laboratory tests, and recommending
costly treatments and operations which insurance companies thought could be
avoided. Subsequently insurance companies stopped cashless facilities in some
of these private hospitals. But there was sharp retaliation to such move, and
courts through various judgments warned the insurance companies not to step
into the shoe of doctors.
LAW LAID DOWN ON MEDICLAIM-
INSURANCE BY APEX COURT-
PART
B
DOCTORS TO DECIDE THE TREATMENT
“It
is the doctors who decide what treatment is required to be given. Once the
insured has paid the agreed amount of premium, insurance company is bound to meet the
expenses”
[Facts
of the case;- Shamim Khan, the plaintiff who was working as a school teacher in
Saudi Arabia suffered unbearable stomach pain when he visited India in July
2000, which led to severe bleeding. Khan was admitted to Bombay hospital where
emergency surgery was conducted. Claim for total expenditure of Rs 41,158 was
rejected on the plea that there was no emergency to undergo operation. Doctor’s
certificate was then produced to prove the emergency in the case.
Apart
from directing the claim of the consumer to be paid, court also fined the
insurer Rs 5000 for rejecting the claim. The order came at a time when
insurance companies are desperately trying to avoid passing claims and
reimbursing expenses, borne by the insured under mediclaim policies. It is
surely a big relief to the consumers at this juncture. ]
Shamim Khan V New India insurance company,
Maharashtra State Consumer Dispute Redressed Commission,2000.
IRDA.GUIDELINES 6th January,2011
Recently
insurance companies short listed some of the hospitals from their panel and
objected to their prescribing a number of laboratory tests, and recommending
costly treatments and operations which insurance companies thought could be
avoided. Subsequently insurance companies stopped cashless facilities in some
of these private hospitals. But there was sharp retaliation to such move, and
courts through various judgments warned the insurance companies not to step
into the shoe of doctors
Some
companies started enhancing their premium amount for senior citizens with a
view that after certain age, their medical expenses do increase. But now this
controversy is also settled and IRDA on 6th January2011 has asked insurance
companies to refrain from charging policy holders the premium amount which is
outside the range filed with IRDA.
THE TIE-UP OF PHARMACIES AND
DOCTORS
A
large quantum of income to the hospitals usually comes from in patients who are
sold medicines at MRP at a very high profit margin whereas the same medicines
are available at 100-400% less outside. But indoor patients are not allowed to
get drugs or consumables from outside.
A
study of medical trade practices in Mumbai sponsored by World Health
Organization reveals the unethical and illegal trade practices of doctors and
drug companies. Pharmaceutical companies sponsor Continuous Medical Education
[CME] camps, where they develop personal bonds with the doctors, which they
further strengthen with sponsored cocktail parties and then overseas trips. The
net result of such favour ultimately
burdens the patients admitted in the hospitals who are prescribed drugs from
specific companies that may be much costlier than other brands available
outside.
A
study of medical trade practices in Mumbai sponsored by World Health
Organization
LAW ON RENEWL OF MEDICLAIM
POLICY
PART-C
“5. A
renewal of an insurance policy means repetition of the original policy. When
renewed, the policy is extended and the renewed policy in identical terms from
a different date of its expiration comes into force. In common parlance, by
renewal, the old policy is revived and it is sort of a substitution of
obligations under the old policy unless such policy provides otherwise. It may
be that on renewal, a new contract comes into being, but the said contract is
on the same terms and conditions as that of the original policy. Where an
insurance company which has exclusive privilege to carry on insurance business
has refused to renew the mediclaim policy of an insured on extraneous and
irrelevant considerations, any disease which an insured had contacted during
the period when the policy was not renewed, such disease cannot be covered
under a fresh insurance policy’
“ Excepting
the acquiring companies no other company in private sector has a right and
privilege to carry on general insurance business in India and to that extent
the acquiring companies have a monopoly over such business. In such a
situation, acquiring companies have the trappings of the State being
other authorities under Article 12 of the Constitution of India.
The acquiring companies thus being the State under Article 12 of the
Constitution are expected to act fairly and
reasonably.”
The
Supreme Court has ruled that public sector insurance companies cannot refuse to
provide medical cover policies to those suffering from pre-existing diseases
and said such an action was arbitrary, illegal and unconstitutional.
A bench of Justices S B Sinha and V S Sirpurkar also asked the Insurance
Regulatory Development Authority (IRDA) to frame suitable guidelines to ensure
that insurance companies, both from public sector and private sector, do not
indulge in the unethical practice of denying medical insurance facility to the
public.
The apex court said public sector insurance companies in particular cannot
indulge in such unhealthy practice as they are "State" within the
meaning of Article 12 of the Constitution and were expected to be fair and reasonable
in their dealings with the public.
"Only because the insured had started suffering from a disease, the same
would not mean that the said disease shall be excluded. If the insured had made
some claim in each year, the insurance company should not refuse to renew
insurance policies only for that reason.," the bench said in its
judgement.
The apex court passed the observation while dismissing a batch of petitions
filed by public sector insurance companies against the Delhi and Gujarat High
Court directions that they had no right to deny medical insurance facility to
those suffering from pre-existing diseases or diseases contracted during the
subsistence of a policy.
Biman Krishna Bose v. United
India Insurance Co. Ltd. and
another reported as (2001) 6 SCC 477
-
LAW LAID DOWN ON MEDICLAIM-
INSURANCE BY APEX COURT
PART A
A.
INSURANCE
COMPANIES USE TRICKY LANGUAGE AND DEFEAT THE PURPOSE OF POLICY.
Apex
National Commission allowed the mediclaim of the
complainant for operation during the first year of the policy as there was
no evidence about the awareness of the patient about the symptoms of the
disease or having got treatment for the same. Most of the people are totally
unaware of the symptoms of the disease they suffer till it is diagnosed and
some medicines referred to be taken. Under such situations, they cannot be held
liable as held by Supreme Court in number of cases earlier also. Not only this,
Harjot
Kour V National Insurance Company 2010 CTJ 168,[National commission.]
B.
MEDICLAIM
CHARGES IN THE PRIVATE HOSPITALS
Private
hospitals were charging higher rates from patients with mediclaim policies
compared to those who did not have any health insurance cover for the same
treatment. The controller and auditor General of
India [CAG] in a recent report pinpointed this fact
In an
interview with Mail Today, a senior doctor at the All India institute of
medical sciences (AIIMS) said that the huge charges of private hospitals,
especially for those having a health insurance cover has contributed to the
adverse claim ratio of insurance companies and consequently increases in
premiums.
The
controller and auditor General of India [CAG] in a recent report
C.
PRE-EXISTING
DISEASE AND OTHER EXCLUSION CLAUSES
Mithoolal Nayak Vs. Life
Insurance Corporation of India (AIR 1962 SC 814), in which
the position of law was stated thus: The three conditions for the application
of the second part of s. 45 are:
(a) the statement
must be on a material matter or must suppress facts which it was material to
disclose ;
(b) the supression
must be fraudulently made by the policy holder; and
(c) the policy holder must have known at
the time of making the statement that it was false or that it suppressed facts
which it was material to disclose.
Mithoolal Nayak Vs.
Life Insurance Corporation of India (AIR 1962 SC 814),
New
India Insurance Company V Anand Gourana reported in CTJ 2010 the Madhya Pradesh State Commission
The insurance companies are
repudiating even genuine mediclaims taking advantage of their exclusion clause. In yet another recent case New India
Insurance Company V Anand Gourana
reported in CTJ 2010 the Madhya Pradesh State Commission rejected the plea of insurance company that the charges
incurred at hospital or nursing home primarily for diagnosis, X-ray or laboratory examination are not
reimbursable.
Life
Insurance Corporation of India vs. Smt.G.M.Channabasamma (1991) (1) SCC 357,
It is
well settled that a contract of insurance is contract uberrima fides and there
must be complete
good faith on the part of the assured. The assured is thus under a solemn
obligation to make full disclosure of material facts which may be relevant for
the insurer to take into account while deciding whether the proposal should be
accepted or not. While making a disclosure of the relevant facts, the duty of
the insured to state them correctly cannot be diluted. Section 45 of the Act
has made special provisions for a life insurance policy if it is called in
question by the insurer after the expiry of two years from the date on which it
was effected.
Authorities
in-charge of management of the affairs of the Corporation should bear in mind
that its credibility and reputation depend on its prompt and efficient service.
Therefore, the approach of the Corporation in the matter of repudiation of a
policy admittedly issued by it should be one of extreme care and caution. It
should not be dealt with in a mechanical and routine manner.
D.
CLAIM NOT TENABLE ;
Recently
insurance companies short listed some of the hospitals from their panel and
objected to their prescribing a number of laboratory tests, and recommending
costly treatments and operations which insurance companies thought could be
avoided. Subsequently insurance companies stopped cashless facilities in some
of these private hospitals. But there was sharp retaliation to such move, and
courts through various judgments warned the insurance companies not to step
into the shoe of doctors.
LAW LAID DOWN ON MEDICLAIM-
INSURANCE BY APEX COURT-
PART
B
DOCTORS TO DECIDE THE TREATMENT
“It
is the doctors who decide what treatment is required to be given. Once the
insured has paid the agreed amount of premium, insurance company is bound to meet the
expenses”
[Facts
of the case;- Shamim Khan, the plaintiff who was working as a school teacher in
Saudi Arabia suffered unbearable stomach pain when he visited India in July
2000, which led to severe bleeding. Khan was admitted to Bombay hospital where
emergency surgery was conducted. Claim for total expenditure of Rs 41,158 was
rejected on the plea that there was no emergency to undergo operation. Doctor’s
certificate was then produced to prove the emergency in the case.
Apart
from directing the claim of the consumer to be paid, court also fined the
insurer Rs 5000 for rejecting the claim. The order came at a time when
insurance companies are desperately trying to avoid passing claims and
reimbursing expenses, borne by the insured under mediclaim policies. It is
surely a big relief to the consumers at this juncture. ]
Shamim Khan V New India insurance company,
Maharashtra State Consumer Dispute Redressed Commission,2000.
IRDA.GUIDELINES 6th January,2011
Recently
insurance companies short listed some of the hospitals from their panel and
objected to their prescribing a number of laboratory tests, and recommending
costly treatments and operations which insurance companies thought could be
avoided. Subsequently insurance companies stopped cashless facilities in some
of these private hospitals. But there was sharp retaliation to such move, and
courts through various judgments warned the insurance companies not to step
into the shoe of doctors
Some
companies started enhancing their premium amount for senior citizens with a
view that after certain age, their medical expenses do increase. But now this
controversy is also settled and IRDA on 6th January2011 has asked insurance
companies to refrain from charging policy holders the premium amount which is
outside the range filed with IRDA.
THE TIE-UP OF PHARMACIES AND
DOCTORS
A
large quantum of income to the hospitals usually comes from in patients who are
sold medicines at MRP at a very high profit margin whereas the same medicines
are available at 100-400% less outside. But indoor patients are not allowed to
get drugs or consumables from outside.
A
study of medical trade practices in Mumbai sponsored by World Health
Organization reveals the unethical and illegal trade practices of doctors and
drug companies. Pharmaceutical companies sponsor Continuous Medical Education
[CME] camps, where they develop personal bonds with the doctors, which they
further strengthen with sponsored cocktail parties and then overseas trips. The
net result of such favour ultimately
burdens the patients admitted in the hospitals who are prescribed drugs from
specific companies that may be much costlier than other brands available
outside.
A
study of medical trade practices in Mumbai sponsored by World Health
Organization
LAW ON RENEWL OF MEDICLAIM
POLICY
PART-C
“5. A
renewal of an insurance policy means repetition of the original policy. When
renewed, the policy is extended and the renewed policy in identical terms from
a different date of its expiration comes into force. In common parlance, by
renewal, the old policy is revived and it is sort of a substitution of
obligations under the old policy unless such policy provides otherwise. It may
be that on renewal, a new contract comes into being, but the said contract is
on the same terms and conditions as that of the original policy. Where an
insurance company which has exclusive privilege to carry on insurance business
has refused to renew the mediclaim policy of an insured on extraneous and
irrelevant considerations, any disease which an insured had contacted during
the period when the policy was not renewed, such disease cannot be covered
under a fresh insurance policy’
“ Excepting
the acquiring companies no other company in private sector has a right and
privilege to carry on general insurance business in India and to that extent
the acquiring companies have a monopoly over such business. In such a
situation, acquiring companies have the trappings of the State being
other authorities under Article 12 of the Constitution of India.
The acquiring companies thus being the State under Article 12 of the
Constitution are expected to act fairly and
reasonably.”
The
Supreme Court has ruled that public sector insurance companies cannot refuse to
provide medical cover policies to those suffering from pre-existing diseases
and said such an action was arbitrary, illegal and unconstitutional.
A bench of Justices S B Sinha and V S Sirpurkar also asked the Insurance
Regulatory Development Authority (IRDA) to frame suitable guidelines to ensure
that insurance companies, both from public sector and private sector, do not
indulge in the unethical practice of denying medical insurance facility to the
public.
The apex court said public sector insurance companies in particular cannot
indulge in such unhealthy practice as they are "State" within the
meaning of Article 12 of the Constitution and were expected to be fair and reasonable
in their dealings with the public.
"Only because the insured had started suffering from a disease, the same
would not mean that the said disease shall be excluded. If the insured had made
some claim in each year, the insurance company should not refuse to renew
insurance policies only for that reason.," the bench said in its
judgement.
The apex court passed the observation while dismissing a batch of petitions
filed by public sector insurance companies against the Delhi and Gujarat High
Court directions that they had no right to deny medical insurance facility to
those suffering from pre-existing diseases or diseases contracted during the
subsistence of a policy.
Biman Krishna Bose v. United
India Insurance Co. Ltd. and
another reported as (2001) 6 SCC 477
-
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