Lok Sabha Question No. 4694 (UNSTARRED), answered on 2018-03-23
Subject: Non-paying of Insured Amount
Ministry: FINANCE
Asked by: VINOD CHAVDA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 4694

TO BE ANSWERED ON 23rd March 2018/ Chaitra 2, 1940 (Saka)

## Non- paying of Insured amount

- (a) whether the Government has made any rule to punish the insurance companies which are paying less amount than the real amount insured by the clients for

4694. SHRI VINOD LAKHAMASHI CHAVDA: Will the Minister of FINANCE be pleased to state: their medical treatments; and

- (b) if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a) In order to monitor the settlement of claims in health insurance policies, the Insurance  Regulatory  Development  Authority  of  India  (IRDAI)  had  notified  IRDAI (Health Insurance) Regulations, 2016, which inter-alia, specifies various norms on settlement of claims and stipulate certain measures for protection of policyholder interests. Further, any insurer found to be violating the Regulations and Guidelines framed under the Insurance Act, 1938 shall be penalized as per the provisions of Section 102 of the Act.
- (b)      Since financial year 2015-16, there were 3 instances wherein the IRDAI had taken  regulatory  action  against  the  insurance  companies  on  noticing  excess deductions from health insurance policy claims. The details are given in Annexure.

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## Annexure referred to in reply of part (b) of Lok Sabha Unstarred Question no. 4694 for 23.03.2018.

| Order dated                             | Licensed entity                              | Observation                                                                                                          | Details of Direction                                                                                                                                                                                                                                                                 |
|-----------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Charge 38 of Order dated 30-07-2015     | L &TGeneral Insurance Company Limited        | Deduction of other hospitalization expenses in the proportion to the eligibility of the room rent.                   | Penalty of Rs.5 lacs has been imposed and insurer is directed to refund the excess deductions along with penal interest. Compliance: Insurer submitted that it has identified 350 health claims and refunded an amount of Rs.34,30,718 including penal interest.                     |
| Charge 3 of Order dated 16/05/2016      | Vidal Third Party Administrator              | Deduction was wrongly made towards co-pay.                                                                           | Direction was given to re-examine all such cases and to refund the excess recovered amount Compliance: Insurer submitted that it has refunded Rs.3,72,000 with regard to 11 cases where co-pay was wrongly recovered.                                                                |
| Charge 2 of Order dated 28/06/2016      | United India Insurance Company Limited       |                                                                                                                      |                                                                                                                                                                                                                                                                                      |
| Charge 5,6& 7 of Order dated 20/07/2016 | Bharti Axa General Insurance Company Limited | Wrongful deduction from the associated charges and other medical charges in the proportion to room rent eligibility. | Penalty of Rs.5 lacs imposed and insurer is directed to ensure that no claim is settled based on the product features and conditions that is not filed and approved under F&U procedure of Authority. Compliance: Insurer agreed to the direction and remitted penalty of Rs.5 lacs. |