Oriental Insurance and Paramount Health Service Company Held Liable For Deficiency In Service

On a case filed by Consumer Education and Research Society (CERS), Ahmedabad, and B. J. Saraf, a medical insurance policyholder, the Consumer Disputes Redressal Forum, Ahmedabad, held Oriental Insurance Company and Paramount Health Services guilty of deficiency in service.

The Forum held them jointly and severally liable to pay Rs. 1,05,000 with a 12 per cent compound interest from 22 October 2004 until payment. It also directed them to pay Rs. 5,000 each for mental agony and the cost incurred. The order should be executed within 30 days of the receipt of the order, the Forum added.

Saraf and his wife had taken a medical insurance policy from New India Assurance in 1999. While renewing the policy in 2002, he switched the policy to Oriental Insurance and raised the policy amount from Rs. 1,00,000 to Rs. 2,00,000, plus a bonus of Rs. 30,000. Saraf left the slot in the policy form ‘Pre-existing Disease’ blank and in support submitted relevant documents. The insurer agreed to the increase in the amount and accepted the policy.

In July 2003, the complainant suffered from pain in the right knee and, after over a ear’s treatment, had to undergo an operation at the Sterling Hospital in October 2004. The operation cost him Rs 2,35,493. Oriental Insurance and Paramount Health Services were liable to reimburse the amount.

The insurer approved a claim of only Rs.1,25,000. Saraf’s letters to convince it to reimburse the total amount of claim evoked no reply.

When Saraf approached CERS, they jointly complained to the Forum. The insurer denied any deficiency in service and contended that the complaint was not in the jurisdiction of the Forum. The opposite parties also claimed that Saraf had submitted only the ECG and urine reports and that there was no report related to his knee. They added that Saraf’s intention in increasing the policy amount during the renewal was mala fide as he wanted to claim and get a higher amount in the future.

Saraf stated that he had submitted the blood, sugar and ECG reports as demanded and that the companies had never asked him for the report on the knee.

Mr. U. M. Raval presided over the Forum with Mr. Bharatbhai H. Joshi as Member. Mr. H. P. Motiramani appeared for the complainants and Ms Parulben Advaryu for Oriental Insurance and Paramount Health Services.

Date : 12/02/2007
Place : Ahmedabad

Pritee Shah
Senior Director - CERC
Editor, INSIGHT - The Consumer Magazine