Introduction

The experience of policyholders with health insurance companies often hinges on various challenges, one of which is the resolution of disputed claims. This article delves into a case that highlights the intricacies and often precarious nature of navigating the complaint process with insurers, specifically focusing on the interaction with the Insurance Regulatory and Development Authority of India (IRDAI) and the Insurance Ombudsman.

A Case of Mis-Selling and Mis-Communication

The case revolves around the deterioration of a 10-lakh health insurance policy to a 5-lakh policy, along with a misleading claim about reimbursement for a full-body health checkup. The policyholder, who initially opted to retain the higher limit and the full-body health checkup benefit, later decided to downgrade to the 5-lakh policy. However, the health insurance company, HDFC ERGO, provided written permission stating that the policyholder would still retain the 2000 INR reimbursement after the policy degradation. Despite this, HDFC ERGO repudiated the claim upon renewal of the 5-lakh policy on the grounds that the terms of the 2000 INR reimbursement only apply to every two years within a policy year.

The policyholder's disagreement led to multiple escalations:

Discussion with the HDFC ERGO grievance redressal office Submission of a complaint to the Insurance Ombudsman Escalation of the matter to IRDAI to evaluate the Insurance Ombudsman's competence

Disputes and Verdicts

The Insurance Ombudsman, a central government administrative law body, initially ruled against the policyholder, citing the terms and conditions of the 5-lakh policy. Upon review, the Ombudsman acknowledged a discrepancy when they found that an email sent by HDFC ERGO on 17th November 2020 authorized the reimbursement of 2000 INR, which influenced the policyholder's decision to switch to the 5-lakh policy. However, the Ombudsman's verdict still sided with HDFC ERGO, which reportedly lied about the email's contents. This oversight led to further investigation by IRDAI.

IRDAI and the Role of the Grievance Redressal Office (GRO)

Upon registration of the complaint, IRDAI forwarded the matter to the GRO of HDFC ERGO, questioning the competence of the Insurance Ombudsman. However, the GRO, which is part of the same insurance company, is not equipped to investigate the independence and competence of the Insurance Ombudsman. This procedural issue highlights the need for a more robust and independent system to address such conflicts.

Policyholder's Perspective and Legal Implications

The insufficiency of the GRO in this case raises critical questions about the impartiality and effectiveness of the complaint resolution mechanisms. The policyholder's emails and documentation must be scrutinized for authenticity, and HDFC ERGO's claims and credentials must be validated to ensure fair and just outcomes. In a legal context, false claims by an insurance company could be considered perjury and forgery, which are serious offenses against society and the state.

The policyholder's persistence in seeking justice has also highlighted the systemic issues within the insurance industry, including the limited scope of the Insurance Ombudsman and the overreaching authority of the GRO. The case underscores the need for more transparent and enforceable claim processes and for the industry to be held accountable by a more independent oversight body.

Conclusion

This case study exposes the complexities and challenges faced by policyholders when dealing with health insurance claims, especially when there are disputes regarding policy terms and miscommunications. It also sheds light on the need for reform in the complaint resolution mechanisms to ensure that policyholders receive fair and impartial treatment. As the insurance industry evolves, it is essential to have stringent regulatory measures and oversight to protect the interests of the consumers.