State Insurance Regulator

Taking an insurance company to court should be used as a last resort as it can tie up a claim in court for many years and seriously delay receiving needed funds to replace a home or pay medical bills.

The first steps are to attempt to work directly with your insuranceagentor insurance firm provider in a calm, patient manner – documenting the entire process all the while. If they end up proving difficult to work with, utilizing the services of a state insurance regulator can help move the process forward.

It has seen from most of the cases that instead of taking due diligence or utmost care, rejection of claim still happen.

Few questions are resolved by this article like, options available for policyholder for claiming rejection etc.

Following are the procedure by which the policyholder may seek resolution
1. Approach IRDA, an Insurance Regulatory and Development Authority

2. An Approach to Insurance Ombudsmen under Rule 12 of Redress of Public Grievances 1998.
3. Approach to Alternative Dispute Resolution (ADR), under any specific policy.
4. An Approach to Consumer forum.
5. Approaching the commercial court under section 2(c)(xx) of the Commercial Court ,commercial division & Commercial Appellant Division Act.

IRDA, an Insurance Regulatory and Development Authority (Approach 1)
Before one intensify touch on IRDA, you ought to have:
1. Approached the grievance redressal cell of the underwriter or the Insurance Company. Provided all the supporting documents and brought acknowledgement of the criticism. You’ll be able to additionally drop e-mail to Grievance Redressal Cell of the insurance firm.
2. If the underwriter doesn’t respond and resolve the problem to your satisfaction among fifteen days from the date of criticism, you’ll be able to intensify to IRDA.

How does one step up the pertain IRDA?
You can approach the Grievance Redressal Cell of the patron Affairs Department of IRDA in either of following ways that.
# One Call Toll-Free range 155255 or 1800 4254 723[5]
# Send e-mail to complaints atirda.gov.in
# Register your criticism through Integrated Grievance Management System (IGMS).
# Send a letter or fax (040-6678 9768) to IRDA together with your criticism. One be able to notice the criticism kind and address here.

Insurance Ombudsmen under Rule 12 of Redress of Public Grievances 1998 (Approach 2)
Insurance Ombudsman has power under Section 12(1)(b) in the Redressal of Public Grievances Rules, 1998to act as a counsellor or mediator which are related to any partial or total repudiation of claims by an insurer.[7]

In addition to this, the person in authority shall give in writing about the settlement done between in the policyholder and the insurer.

This is to be noted that the decision made by the Insurance shall be binding and final on both the parties.

Whenever the policyholder wants to approach Insurance Ombudsman, he/she may approach without any layer too. You must approach the Insurance investigator beneath whose jurisdiction the branch or workplace of the underwriter falls.

Consumer forum or a court of law (Approach 3)
Once increase to IRDA or approaching Insurance investigator (in choose cases) one can take the fight to client forum or civil courts.

One can also approach the courts while not approaching IRDA or investigator. However, this is often seemingly to be a long method and not restricted by timelines as in 1st 2 ways.

In the case of Om Prakash v. Reliance General Imsurance[8]is has been held by the honourable supreme court that the insurance company cannot reject claims on Technical Grounds.

End-Notes
[2] http://www.policyholder.gov.in/RPG_Rules_concerning_Ombudsman_scheme.aspx
[3] If there is an arbitration clause.
[4] https://www.prsindia.org/uploads/media/Commercial%20courts/Commercial%20courts%20Act,%202015.pdf
[5] https://www.irdai.gov.in/Defaulthome.aspx?page=H1
[6] http://www.policyholder.gov.in/uploads/CEDocuments/complaintform.pdf
[7] Consumer Education Website, Address of Ombudsmen available athttp://www.policyholder.gov.in/Addresses_of_Ombudsmen.aspx
[8] MANU/SC/1259/2017

A Hybrid insurance product is basically a combination of two insurance products which may include few featured of financial instrument, however not necessarily accessing the capital market.

A variety of Hybrid products have been developed. Hybrid insurance plans have been primarily innovated by the insurance companies providing private long-term care insurance. This is one of the ongoing and quickly developing advancement in the insurance market. In light of the customers’ demands, the insurance business has made innovative combinations, or ‘hybrid’, and other wellbeing strategies.

These courses of action offer health advantages which are given by annuity or life coverage and any other long-term insurance plans. The historical background is mainly the continuing interest of government and policy-makers to increase such innovations especially in the long-term care insurance to reduce strain on the payment of such facilities in the long run.

This not only helps in curbing the spiraling cost of affording long term care insurance for the insured as well as reduces the risk factor, thus benefiting the profit motive insurers. Thus, it is more convenient for the insured because of variety of benefits offered by hybrid product than compared to a traditional insurance product. In addition to this hybrid insurance plans though enables economies of scale, the charge on premiums differ from person to person depending on the age and health conditions.

Nature of Long-Term Care Insurance:
The nature of such insurance is to cover for all the costs and expenses incurred for the services done to ensure well-being of the individual. It becomes more useful where an insured is suffering with a certain disability and need constant care. A certain class of financial loss due to such disability will be covered under such insurance.

This is different from a health insurance which is prevalent in India. The concept of long term care insurance (hereinafter referred to as LTC) is new to India because of its limited customers and high premium. However, the traditional long-term care insurance unlike reimbursing medical expenses for certain illness, it also covers the day to day care taken to ensure the health of the customer.

The introduction of long term care insurance has been long brought up by the IRDAI, which has recently started formulating guidelines for the long-term care insurance. This is because of the growth of health care in India and the new development based on the need for a now innovative policy in the insurance sector.

This is also different from the Term insurance as long-term care insurance primarily covers the expenses of basic needs of aging people. Ostensibly, these insurances may sound expensive, but they are feasible with the growth of nuclear family, increase in population of older people, and so on. Additionally, they also provide tax benefits.

Nature of Disability Insurance:
Disability insurance is basically that the insurer provides for financial benefits that maybe equal to the income the insured could have earned in the absence of disability. Usually it replaces the a portion of your lost income caused due to such disability. Disability insurance includes both short term disability benefits as well as long term disability benefits.

Additionally, disability insurance policy can be taken for permanent disability or temporary disability; full disability or partial disability, and depending on the degree of disability, shall the insurance company shall make payment. It ensures financial security to your lifestyle and family in case of any unfortunate circumstances.

This type of insurance is usually taken by the employer of an organization on behalf of the employees and in case of any misfortune, the insurance company shall pay monthly benefits for the lost period, however in this case this insurance taken by the employer is subject to taxes unlike a purchase of disability insurance by a non-employee. Disability insurance are importance as much as health insurance in India.

The growth and scope of disability insurances in private sector is very limited, exactly why the need for awareness of disability insurance as based on the recent report on the survey of disabilities in India.

Difference Between Disability And Long-Term Care Insurance:
Most of the time, these insurance policies overlap and misunderstood to be more or less the same. However, there are unique elements in each insurance that distinguishes one from the other. Ostensibly, both help in financial planning, nevertheless, have distinct characteristics.

Disability insurance is monthly benefits provided to the disabled and his family only for a specific time or until the retirement age, which is usually 65 years. While, having a long-term care insurance extends until the maturity or as long as such care and services is necessary for the insured.

Hybrid of Disability And Long-Term Care Insurance And Its Feasibility In India:
According to the World Bank, more than 40% of hospitalized people borrow money or sell assets to cover expenses and 35% fall below the poverty line. Disability protection and life coverage are ordinarily bought before in life than long- term care protection.

Thus, if hybrids of long term care protection with both of these two kinds of protection were showcased to people at ages when incapacity and life coverage are ordinarily advertised, these combinations could have a helpful impact of empowering the growth of such insurances.

In India, the recognition for hybrid insurance models began around the early months of 2015 and later on based on the report conferred by the Confederation of Indian Industries (CII) recommended the introduction of hybrid model as an implementation step towards universal health coverage.

Thus, the IRDA in 2016 introduced the IRDA (Health Insurance) Regulations 2016 which covered hybrid or combinations plans of health insurance with any life insurance plan, which is still practiced in India. However, what observe that the scope of hybrid insurance plans in India is only limited to life insurance. The development in such area is the need of the hour.

Even with the existence of disability insurance, the concept of long term care insurance is relatively new term, though they maybe a part of the health insurance per se. However, it is not always necessary that all health insurance plans are also long-term care insurance plans.

Conclusion:
It creates the impression that undeniable hybrids that significantly protect against the dangers secured by the both the protection plans are uncommon in the market. This may demonstrate that one potential interest of hybrid insurance of long-term care is that they enable the purchaser to buy one strategic plan that guarantees against two dangers, despite the fact that scope will be restricted for the existence of both the risks.

Rather, the protection gives the adaptability of paying out which is subjected upon which misfortune happens first and repayment for the same. The hybrid protection items may subsequently exhibit one approach to accomplish a fractional and second-best answer for the issue of numerous critical dangers. The few long- term care insurance hybrid with disability protection plan are deserving of further examination.

Such combinations can enable the purchaser to assess in a reasonable procedure, the potential needs to supplant income lost because of incapacity and in addition to pay for that might be required health care services and necessities because of the handicap, and may advice the insured to buy an insurance on the risk that has not been covered under the combined risk.

At the same time, it is better than getting separate insurance covers for varied misfortunes that may be the result of disability. Therefore, hybrid protection items will require a well aware customer with a specific end goal to settle on the money-related choice that is best for him or her. This type of insurance has been emerging aspect and since IRDA is gradually recognizing this insurance product, it can be inferred that the need is real, and the government must act swiftly for consumer protection.

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Hon’ble Justice Pratibha M Singh stated Can’t Exclude Genetic Disorders in Insurance Policy. High Court of Delhi on 26 February directed the Insurance Regulatory Development Authority of India to review the exclusion clauses in the insurance contracts.

So that medical claims were not rejected on the basis of exclusions relating to “genetic disorders” like cardiac conditions, high blood pressure and diabetes.

Stated that the availing of health insurance was an integral part of the ‘Right to Health and healthcare’ under the Constitution, Hon’ble Justice Pratibha M. Singh held that the clause in the insurance policy excluding a person with “genetic disorder” from availing its benefit was “discriminatory” and contrary to public policy.

The judge left it to lawmakers to take necessary steps in this regard, saying there was an urgent need for a proper framework against genetic discrimination.

“The Insurance Regulatory Development Authority of India is directed to re-look at the exclusionary clauses in insurance contracts and ensure that insurance companies do not reject medical claims on the basis of exclusions relating to genetic disorders,” the verdict stated.

The exclusion of genetic disorders in all forms would be contrary to public policy. Several of the prevalent medical conditions which affect a large mass of population, including cardiac conditions, high blood pressure, diabetes in all forms, could be classified as genetic disorders. High Court of Delhi

“The entire purpose of taking medical insurance would be defeated if all genetic disorders are excluded,” the High Court said in the judgement, holding that the law and norms of ‘genetic disorders’ in the insurance policies in India were “too broad, ambiguous and discriminatory” and hence violated the constitutional provisions.

It said the insurance companies were free to structure their contracts based on reasonable and intelligible factors which should not be arbitrary and in any case cannot be exclusionary.

Discrimination in Health Insurance Based on Genetics is Unconstitutional:
The judge said discrimination in health insurance against individuals based on their genetic disposition or genetic heritage, in the absence of appropriate genetic testing and laying down of intelligible differentia, was unconstitutional.

Hon’ble Justice Pratibha M. Singh stated: “The broad exclusion of genetic disorders is thus not merely a contractual issue between the insurance company and the insured but spills into the broader canvas of Right to Health. There appears to be an urgent need to frame a proper framework to prevent against genetic discrimination as also to protect collection, preservation and confidentiality of genetic data.

Insurance companies are free to structure their contracts based on reasonable and intelligible factors which should not be arbitrary and in any case cannot be exclusionary.

“Such contracts have to be based on empirical testing and data and cannot be simply on the basis of subjective or vague factors. It is for lawmakers to take the necessary steps in this regard, he said.

This verdict in Jai Prakash Tayal v/s United India Insurance Company Limited

the appellant Mr.Jai Prakash Tayal was suffering from Hypertrophic Obstructive Cardiomyopathy, he was denied his medical insurance claim simply on the grounds that it was genetic, Since genetic diseases were not payable as per the policy.

Earlier the trial court had ruled in favour of Jai Prakash Tayal, holding that there cannot be a discriminatory clause against persons who suffered from genetic disorders and they were entitled to medical insurance. United India Insurance Company Limited had appealed against the trial court’s order.

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Explained herein with Case laws the Relation between Indemnity and Insurance-whether insurance contracts are contracts of indemnity.

According to section 124 of the Indian Contract Act, a contract of indemnity means, a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person.

A contract where one party promises to save other from loss which may be caused, either
1. By the conduct of promisor himself
2. Or by the conduct of any other person

Definition given in Sec. 124 is very narrow. It includes only:
(i) Express promises to indemnify, and
(ii) The loss caused by the conduct of the promisor or any other person.

However, it does not include:
(i) Implied promises to indemnify, and
(ii) Loss caused by accidents and events not dependent upon the conduct of the promisor or any other person.

Section 124 does not cover a promise to compensate for loss not arising due to human agency [Gajanan Moreswar vs. Moreswar Madan]. Therefore, strictly speaking, contracts of insurance cannot be included in the definition.

In the case of New India Assurance Company Ltd. Vs Kusumanchi Kameshwra Rao & Others, 1997, court held that a Contract of indemnity is a direct engagement between two parties thereby one promises to save the other harm. It does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not or may not depend on the conduct of indemnifier or any other person.

Thus, if under a contract for insurance, an insurer promises to pay compensation in the event of loss by fire, such a contract does not come within the purview of section 124. Such a contract is valid contract as being contingent contract as defined in section 31.

However, it was not the intention of the legislature, as it has been held by Justice M.C. Chagla that “Sections 124 and 125 of the Contract Act are not exhaustive of the law of indemnity and the Courts here would apply the same equitable principles that the Courts in England do.” [Ganjanan Moreshwar v. Moreshwar Madan]

English Law has given a comprehensive definition which is as follows:
“A promise to save another harmless from loss caused as a result of a transaction entered into at the instance of the promisor.”

From the above definition it would be seen that it covers the loss caused by accidents and events not depending upon the conduct of any person. Thus it is much wider in its scope and as such, Indian Courts apply and definition given by England Law to Indian cases.

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The whole world is developing a slew of measures to cope up with COVID-19, India is not left untouched with the increasing number of cases day by day with rising death tolls.

India as a country has encouraged mass production of PPE kits to achieve self-reliance with the imposition of stricter lockdown regulations in the affected areas. In these trying times, the Supreme Court in a remarkable judgement has issued notice to Centre and Insurance Regulatory Development Authority of India (IRDAI) for directing insurers to provide medical insurance for treatment of mentally ill patients.

IRDAI’s dereliction of its duties with violation of Section 24(1) of Mental Healthcare Act, 2017 raises serious questions which are left unanswered. Through this paper, the author intends to provide legal insights upon the SC order with its rationale and pressing need in the prevalent current scenario.

Significance Of This Development

people are left stranded with no family support in these pressing COVID-19 times, they become more prone to depression and anxiety issues. In our conventional society, mental illness is often portrayed as a taboo or form of seclusion from societal relations. People suffering from mental health problems are regarded as neglected part of society which are left to suffer on their own without any helping hands. Without any recourse, medical health insurance proves as a lasting resort for them to cope up with rising medical expenditures.

This proves a progressive step towards considering mental illness at par with the physical illness which will further help in providing better mental health care facilities. India’s health care spending stands of 3.6% of total GDP expenditures, the lowest in comparison to other developing countries. With out of the pocket health expenses, people are not being provided with basic health facilities. This move is aimed at widening the scope of facilitating insurance coverage to needy mentally ill patients.

In these trying times of health emergencies, health insurance acts as boon for people suffering from different diseases. According to the National Mental Health Survey, mental illness cases proportionately increase with less income, low education and limited employment which form the part of widespread ramifications of COVID-19 crisis. This move will help in properly temporary relief to mentally ill people who are left stranded without any help. But despite the enactment of relevant statutory provisions, IRDAI has failed to provide directives to different insuring authorities to include mental illness as part of physical illness for a mental health insurance claim.

The cold attitude of IRDAI towards taking legal action against unregulated insurers raised serious objections about the transparency of it. This move will further help in providing insurance cover to mentally ill patients along with the imposition of action against different authorities for non-compliance of the same.

Legal Nuances

According to Section 21(4) of the Mental Health Care Act, all insurers are mandated to provide medical insurance for treatment of mental illness on a similar basis for treating physical illness. This provision was included as a result of ratification of United Nations Convention on Rights of Persons with Disabilities (UNCRPD), Article 25 of UNCRPD deals with health and its sub-clause (e) provides for prohibition of discrimination in relation to Health insurance against Persons with Disabilities[4].

In the recent case, the petitioner has also filed an RTI application for disseminating information of insurers who conceded to order passed by IRDAI in 2018. But in response, despite the inclusion of Section 21(4) in the Act, its implementation remains a stricter challenge as none of the insurance companies have adhered to the same.

This biased behaviour also violates the fundamental right of equality under Article 14 of the Indian constitution as mentally ill patients are disproportionately affected as the existing laws prove to be ineffective. This violation discriminates mentally ill patients as a lack of appropriate health insurance cover only increases their risks.

Critical Analysis

The IRDAI was established as a central authority to regulate the structure of the evolving insurance industry of India. But due to it the prevalent red-tapism, it has been bypassing its responsibilities for stricter implementation of Section 21(4) of MHCA, 2017. IRDAI had also issued an order in 2018 complying all insurance companies to cover mental illness under the purview of Health insurance but without continual follow up, it failed to achieve the desired purpose.

The reluctance in taking stern action against insurance companies and its casual stance for the inclusion of mental illness under the Health insurance scheme poses serious doubts upon its unaccountable behaviour. Transparency helps in enhancing the credibility of any institution but its inaction on the errant behaviour of different insurance companies provides an ideal example of iniquitousness in its functioning.

The Supreme Court has also been continuously monitoring the rehabilitation issues of thousands of people who are languishing in different hospitals despite they are fit for discharge. According to SC, rehabilitation has a wider scope and includes physical, medical, occupational and psychological services necessary for basic existence. But the irresponsible behaviour of IRDAI has excluded a multitude of people from taking benefits of health insurance scheme.

Conclusion

In these pressing times, the significance of medical treatment for mental illness become paramount for achieving better health care facilities. It is high time that IRDAI and Health Ministry should provide an extensive report regarding the compliance of Section 24(1) by different insurance companies for achieving transparency. With recent advancements, it is the hour that society should revamp its ideals to change the notion of mentally ill patients from neglected to being accepted by every section of society.

End-Notes:

Dhananjay Mohapatra, Why is mental illness not covered under the medical insurance, asks SC, The Times of India, June 17, 2020
Pooja Mehra Indian economy needs a bigger dose of health spending, Live Mint, April 8th, 2020. https://www.livemint.com/news/india/india-s-economy-needs-big-dose-of-health-spending-11586365603651.html
Gururaj G, Varghese M, Benegal V, Rao GN, Pathak K, Singh LK, et al. Bengaluru: National Institute of Mental Health and Neurosciences Publication; 2016. National Mental Health Survey of India, 2015-16
Samanwaya Rautray SC wants mental illness to be covered by insurance companies as provided in law The Economic Times. June 16th, 2020.

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