Bombay High Court
Gaurang Dinesh Damani vs Union Of India And 33 Ors on 13 August, 2015
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sbw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
PUBLIC INTEREST LITIGATION NO.12 OF 2011
WITH
CHAMBER SUMMONS NO.126 OF 2014
WITH
CHAMBER SUMMONS (ST)NO.54 OF 2014
Gaurang Dinesh Damani ..Petitioner
Versus
Union of India & Ors. ig ..Respondents
...........
Mr. Gaurang Dinesh Damani, Petitioner-in-person.
Mr. Rui Rodrigues a/w Rajinder Kumar & D. P. Singh for Respondent
No.1-UOI.
Mr. Beny Chatterji, Senior Advocate, with Nishita Lamba i/b. Daya
Gupta for Respondent No.2-IRDA.
Mr. Yogesh Naidu a/w Asim Vidhyarthi & Ms. Veena Shankar i/b.
A.S. Vidhyarthi for Respondent No.5.
Mr. Nalin Majithia i/b. Habiya Kanthawala for Respondent No.31.
Dr. Birendra Saraf a/w Rajat Pradhan i/b. Phoenix Legal ATPA for
Respondent No.33.
...........
CORAM: MOHIT S. SHAH, C.J. &
A. K. MENON, J.
DATE : 13 AUGUST 2015.
ORAL ORDER
In this PIL filed in January 2011, the petitioner had
prayed for various reliefs including direction to the Union of India,
Ministry of Health and Family Welfare to make clearer rules to
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ensure that the consumers get their claims settled as promised in
their respective insurance policy documents and to restrict the
powers of Third Party Administrators (TPA) and to debar them from
processing claims. The petitioner had also prayed for restoration of
the cashless facility as it was causing prejudice to the holders of the
mediclaim policies. The petitioner had also prayed for various other
reliefs. The petitioner had also made out other grievances in the PIL
against functioning of respondent no.2 - Insurance Regulatory
Development Authority (IRDA).
2.
Under the Insurance Regulatory and Development Authority
Act, 1999 particularly under section 14 of the said Act provides that
the authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.
Without prejudice to the generality of the said provisions, sub-section
(2) of section 14 provides that the powers and functions of IRDA
shall include "protection of the interests of the policy holders in
various matters including settlement of insurance claims, surrender
value of policy and other terms and conditions of contracts of
insurance.
3. In exercise of the powers conferred by section 14 and 26 of the
IRDA Act 1999 read with section 114A of the Insurance Act, 1938,
IRDA, in consultation with the Insurance Advisory Committee has
made a IRDA (Third Party Administrators - Health Services)
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Regulations, 2001. Chapter IV thereof in section 21 lays down the
code of conduct for Third Party Administrator. During the pendency
of the PIL, the petitioner had made a grievance about non-framing of
the Health Insurance Regulations of IRDA. Thereafter on
16 February 2013, IRDA has, in exercise of the powers conferred
under section 114A of the Insurance Act 1938 and section 14 read
with section 26 of the IRDA Act, 1999 made the IRDA (Health
Insurance) Regulations, 2013. Regulation 8 thereof provides for
protection of policy holders' interests and contains provisions
regarding settlement/rejection of claim by insurers.
4. The PIL was heard on various dates and after taking into
consideration the suggestions made at the hearing of this PIL, we
find that some of the main features of the Health Insurance
Regulations, 2013 are as under:-
"Average claim size for the same ailment category, for
Cashless v/s Reimbursement:
As per Annexure-3 and earlier statistical reports of IIB,
there is a serious discrepancy in average payments
offered to the reimbursement claims. Also, as per IDA's
annual report (page 45), the claims rejected number at
an astronomical 6.26 lakhs(in 2012-13 it was 5.15
lakhs). In my opinion, this is because of the manner in
which individual (non-group and non-cashless) claims
are settled.
Petitioner's suggestions are as under:-
1- IRDA can make Insurance companies compulsorily set
aside a certain % of their annual profits, for consumer
education (regarding new Health Insurance Regulations
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(HIR); benefits of cashless claims, etc.)
2- Implement in true spirit, the "Key Information Sheet",
as per 8(b) of the HIR, 2013. I have re-attached a
sample for ready reference.
3- Making the policy document as transparent as
possible. For eg. Claim HH751505251 of Policy
260402/48/13/8500000719, says professional charges
are restricted, at 25% of sum assured. Such clauses do
not appear in the policy document, but are used to 'settle'
claims. In any case, this is totally arbitrary and unfair
to the consumer.
4- IRDA can make Insurance companies deal with only
those hospitals which prominently display their rates for
all consumers to see and understand.
5- Re-consider the suggestion of declaring ailment-wise
package rates in the policy document. The package
amounts can be different for different policies like Silver,
Gold and Platinum. Also, each Insurance Company can
be free to choose their own slabs. This is not in any way
a communist approach. It will remove all ambiguity and
in fact, in the long term work in favour of the Insurers."
5. One of the major grievances was about discontinuance of
cashless facility by the hospitals and clinics. In view of the
suggestions made at the hearing of this PIL, the insurance companies
have provided for cashless facility at about 250 hospitals/clinics in
Mumbai under the PPN (Preferred Provider Network) facility. The
petitioner appearing in person submits that there are in all about
3000 hospitals/public clinics in the City of Mumbai and that,
therefore, more and more hospitals and clinics ought to be brought
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under this PPN facility.
6. Therefore, it would be for the IRDA and insurance companies
to make an endeavor to bring more hospitals and clinics under the
PPN so as to give the consumer an option of availing cashless facility
or to go in for reimbursement.
7. While IRDA is supposed to look into the grievance of the
consumers, IRDA must also look into the grievances of hospitals and
clinics which may be facing any difficulties in the matter of
processing of their claims under PPN by the Third Party
Administrators or the insurance companies.
8. The petitioner has other grievances at the hearing, some
of which are as under:-
(i) Overall claims ratio for the years 2013-2014 and 2014-15
(interim, if entire year is not available) needs to be
disclosed;
(ii) Cashless v/s non-cashless (reimbursement) ratio of claims
passed needs to be disclosed;
(iii) Claim severity(cashless claim amount per claim v/s
equivalent non-cashless amount per claim)for the same
ailment needs to be disclosed.
9. The petitioner has also submitted that regulation 8 (b)
requires IRDA to see that every insured shall be provided with a Key
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Information Sheet setting out in simple language briefly but clearly
all the important features of the policy, its claim limits,
disallowances. Although the IRDA is supposed to prescribe such
document, the petitioner himself has prepared a draft.
10. The petitioner shall make a representation to IRDA
highlighting on above issues and such other and further issues as
may be looked into by IRDA along with copy of the draft Key
Information Sheet prepared by the petitioner. Such representation
shall be made within three weeks from today along with an
authenticated copy of this order.
11. Upon receipt of the representation, IRDA shall circulate
such representation to all insurance companies and all other stake
holders in the insurance business inviting their
suggestion/comments. Thereafter IRDA shall consider issuance of
appropriate instructions/guidelines/modification of amendment of
the Health Insurance Regulations, 2013 and Third Party
Administrator Regulation of 2001 as IRDA may consider appropriate,
keeping in mind its duties under section 14A of the IRDA Act.
12. In order to ensure that this is done, IRDA shall circulate
the petitioner's representation to the insurance companies and other
stake holders within 2 months from the date of receipt of the
representation and inviting the comments and suggestions of the
stake holders within 2 months thereafter. The IRDA shall thereafter
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take a decision on the petitioner's representation as well as counter
suggestions of the stake holders within 4 months thereafter.
13. We may indicate that in the order dated 2 August 2013 this
Court had directed IRDA to issue instructions to all insurers to
provide detailed guidelines to the TPA for claims assessment and
admission, as indicated in the Regulation 12(b) for all health
insurance policies. It was also indicated that such guidelines should
also include the packages for various ailments, so that the insurer,
the TPA and the insured would know how much claim would be
reimbursed for a particular ailment. Of course, it was also observed
that the insurer can also prescribe different slabs depending upon
categories of hospitals/clinics where treatment is obtained, or a
percentage of the sum for which the claimant is insured, whichever is
higher. We had further observed that such guidelines shall also be
placed on the website of the concerned insurance company. We are
informed that the IRDA has still not issued such instructions in
compliance with the above directions dated 2 August 2013.
14. Mr. Chatterji, learned Senior Counsel for the IRDA
submits that issuance of detailed guidelines by the insurers to TPAs
would depend upon various factual and policy inputs and that,
therefore, the IRDA has not so far issued such instructions.
15. This issue will be considered after the petitioner, the
insurance companies and TPA and other stake holders make
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representations and after considering their views and suggestions
and counter suggestions. On the above issue also the petitioner shall
make a representation within two months from today.
16. We hope that IRDA will play the pro-active role that the
Parliament expected it to, as is apparent from the provisions of
section 14 of the IRDA Act 1999 since it is supposed promote orderly
growth of the insurance and re-insurance business and also protect
the interests of the policy holders in various matters including
settlement of insurance claims and surrender value of policies and
other terms and conditions of contracts of insurance.
17. During the pendency of the PIL, IRDA (Health Insurance)
Regulations, 2013 were issued which shows that IRDA has taken up
seriously the issue of protection of the policy holders and has made a
beginning in this direction and will continue to do so. We appreciate
this positive step which IRDA has taken.
18. The PIL is, accordingly, disposed of in terms of the above
observations and directions.
19. The Court would like to place on record its appreciation
for the contributions made by Mr. Gaurang Damani, petitioner,
appearing in person, Mr. Beni Chatterji, learned Senior Counsel for
IRDA, Mr. Yogesh Naidu, learned counsel for the GIC and
Dr. Birendra Saraf, learned counsel for the TPA.
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20. Chamber Summons are disposed of in the above terms.
CHIEF JUSTICE
(A. K. MENON, J.)
wadhwa
