NEW INDIA ASSURANCE CO LTD vs A K Kariappa

THE respondent/complainant obtained a group medi -claim policy from the petitioner company for the period from 16.09.2007 to 15.09.2008 for a sum of Rs.1 lakh. The complainant/respondent had to undergo surgery and medical treatment at Sita Bhateja Speciality Hospital incurring expenditure to the extent of Rs.76,309.84 on the said treatment. The claim lodged by him, however, was restricted by the Insurance Company to Rs.34,389/ -. Being aggrieved, the complainant approached the concerned District Forum seeking payment of the balance amount alongwith damages and cost of proceedings.

THE complaint was resisted by the Insurance Company primarily relying upon the note below clause 2 of the Insurance Policy whereby insurance company was under obligation to pay the Surgeon, Anaesthetist, Medical Practitioner, Consultants'' Specialist fees, anaesthesia, blood, oxygen, OT charges, surgical appliances, medicines and drugs, dialyses etc. was restricted to the charges applicable to the category of the room to which the insured was entitled under the said policy. The entitlement for room was restricted to a maximum of 1% of the sum insured per day or actual amount whichever was less.

VIDE its order dated 14.10.2009, the concerned District Forum directed the petitioner company to pay a sum of Rs.33,075/ - to the complainant being the balance amount of the claim alongwith compensation quantified at Rs.5,000/ - and cost of litigation quantified at Rs.1,000/ -. Being aggrieved by the order passed by the District Forum, the Insurance Company approached the concerned State Commission by way of an appeal. The said appeal having been dismissed vide impugned order dated 29.11.2010, the Insurance Company is before this Commission by way of this revision petition.

THE learned counsel for the petitioner submits at the very outset that though they have already paid the entire amount which was payable to the complainant in terms of the order of the District Forum and the amount involved is rather small, they have approached this Commission with a view to have an authoritative pronouncement on the obligation of the Insurance Company in the light of the terms and conditions of the medi -claim policy issued by it.

CLAUSE 2 of the Medi -claim policy taken by the complainant reads as under: - "2.0 Following reasonable, customary and necessary expenses are reimbursable under the policy:

2.1 Room, boarding and nursing expenses as provided by the Hospital/Nursing Home not exceeding 1.0% of the sum insured (excluding Cumulative Bonus) per day or actual amount, whichever is less.

2.2 Intensive Care Unit (ICU)/Intensive Cardiac Care Unit (ICCU) expenses not exceeding 2.0% of the sum insured (excluding Cumulative Bonus) per day, or actual amount, whichever is less

2.3 Surgeon, Anaesthetist, Medical Practitioner, Consultants'' Specialist fees.

2.4 Anesthesia, Blood, Oxygen, Operation Theatre Charges, Surgical Appliances, Medicines and Drugs, Dialysis, Chemotherapy, Radiotherapy, Artificial Limbs, Cost of Prosthetic devices implanted during surgical procedure like pacemaker, Relevant Laboratory/Diagnostic test, X -Ray and other medical expenses related to the treatment.

2.5 Pre -hospitalisation medical charges upto 30 days period immediately before the insured''s admission to hospital for that illness or injury.

2.6 Post hospitalisation medical charges upto 60 days period immediately after the insured''s discharge from the hospital for that illness or injury. Note:

The amounts payable under 2.3 and 2.4 shall be at the rate applicable to the entitled room category. In case insured opts for a room with rent higher than the entitled category as under 2.1, the charges payable under 2.3 and 2.4 shall be limited to the charges applicable to the entitled category."

IT would thus be seen that as far as room, boarding and nursing expenses are concerned, the liability of the insurance company cannot exceed 1% of the sum insured or the actual amount paid by the insured whichever is less. In the present case, the policy amount being Rs.1 lakh, the room boarding and nursing expenses were required to be restricted to Rs.1,000/ - per day. Considering that the actual amount paid by the complainant was much higher, therefore, it cannot be disputed that the complainant was entitled to room rent only at Rs.1,000/ - per day.

AS regards the charges specified in clause 2.3 and 2.4 above, the liability of the insurance company would be restricted to the charges calculated at the rates applicable to the entitled room category, meaning thereby that the insurance company was liable to pay only such charges as were applicable in case a room not exceeding Rs.1,000/ - per day was to be opted by the complainant. However, the petitioner company instead of finding out from the hospital as what would have been the charges under clause 2.3 and 2.4, in case the patient was to opt for a room not exceeding Rs.1,000/ - per day, made a proportionate deduction from the charges paid by the complainant, on an assumption that the charges would be proportionate to the room rent meaning thereby that if the room rent is Rs.2,000/ - per day and the charges paid by the patient are X, the said charges would be X/2, in case, the room rent is Rs.1,000/ - per day. The procedure adopted by the insurance company in my view was faulty. Instead of making a proportionate deduction from the charges paid by the complainant to the hospital it ought to have inquired from the concerned hospital as to what exactly would be the charges payable in case the room rent was Rs.1,000/ - per day. It is quite possible that the said charges would remain same irrespective of whether the room rent is Rs.1,000/ - or Rs.2,000/ - or even Rs.5,000/ - per day. Another possibility is that the charges would vary with the room rent charged by the hospital, but the variation may not be proportionate for the variation in the room rent, yet another possibility is that the charges would be directly proportionate to the room rent. Therefore, it would be necessary for the Insurance Company to make an inquiry in this regard from the Hospital and find out what would be the applicable charges for the room to which the insured is entitled under the terms of the policy. However, since no such exercise was undertaken by the Insurance Company, the deduction made by it except in respect of room rent was not justified.

FOR the reasons stated hereinabove, while clarifying the obligation of the Insurance Company in terms of the clause 2 of the Policy issued by it, I am not inclined to direct refund of the amount already paid to the complainant except the charges in respect of the room rent. The excess charges paid to the complainant by the insurance company for the room rent comes to Rs.6,500/ -. The complainant is directed to refund that amount to the Insurance Company within four weeks from today failing which the said amount shall carry interest @10% p.a. The revision petition stands disposed of accordingly.