Lok Sabha Question No. 3572 (UNSTARRED), answered on 2018-03-16
Subject: Erring Insurance Companies
Ministry: FINANCE
Asked by: PARESH RAWAL, DIPSINH SHANKARSINH RATHOD, DEVUSINH JESINGBHAI CHAUHAN

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

## LOK SABHA UNSTARRED QUESTION NO. 3572

TO BE ANSWERED ON 16 th  March 2018/ Phalguna 25, 1939 (Saka)

## Erring Insurance Companies

3572. SHRI PARESH RAVAL, SHRI D.S. RATHOD and SHRI DEVUSINH CHAUHAN

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has made any rule to punish the insurance companies which are paying less amount than the real amount the clients have insured for their medical treatment; and
- (b) if  so,  the  details  thereof  and  the  action  taken  by  the  Government  against  such erring insurance companies?

## 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 Authority has taken regulatory action  on  noticing  excess  deductions  from  health  insurance policy claims. Details are given in Annexure.

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## Annexure referred to in reply of part (b) of Lok Sabha Unstarred Question no. 3572 for 16.03.2018

| Order dated                             | Licensed entity                              | Observation                                                                                                          | Details of Direction                                                                                                                                                                                                                                                                 |
|-----------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Charge 38 of Order dated 30-07-2015     | L&T General 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 toward 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. |