After making a peek at more than 4 lakh cases on May 6, it’s relieving that the number of daily Covid cases has come down below 3 lakhs. Almost 3 lakh people have lost their lives in India due to Covid with the current 7day average of 4188 as of May 22. While people are getting encouraged to get insured as a precautionary measure, the insurance companies have been adopting a cautionary stance before issuing policies to the customers. The reason being the rising financial pressure on the insurance companies as they have already paid around Rs120 billion claims, according to General Insurance Council, in Covid related cases. The insurers are now emphasizing on submission of post-recovery reports by the customers, who had Covid after the cool-off period is over. The cool-off period is the time for which Covid patients have to wait for post recovery before the policy is issued to them. This period could be 90 days or less. Besides that, customers have to declare any pre-existing ailments while filling the policy form. In these difficult times the tightening of norms is understandable but there are some other key areas of dispute between the insurer and the insured which needs to be sorted out.
Areas of Contention
One such area of dispute is related to the rates charged by the hospitals and the reimbursement made by the insurer. The insurers would like to reimburse as per the rates fixed by the General Insurance Council or the state governments. Some hospitals charge Covid treatment at a rate much higher than the rates fixed by the reputed bodies. Thus the amount received from insurance could be much less than the actual medical expenses made by the customer.
Another area of contention arises when the patient is treated at home. Some insurers deny the reimbursement for home treatment while the others seek daily medical records duly signed by a certified doctor which in itself is a cumbersome process. The companies argue that because the patient was never admitted to the hospital for the minimum period required, they are not obliged to make reimbursement.
For there could be many other points of contention between the two parties, the Government of India has established an institution of Ombudsman to settle any dispute between the insurer and the insured.
The Executive Council of Insurers was established under the Insurance Ombudsman Rules, 2017. The Executive Council for Insurance has been renamed as Council for Insurance Ombudsman as per Insurance Ombudsman (Amendment) Rules, 2021. The objective of this body is to resolve all the complaints relating to the settlement of claims on the part of insurance companies or insurance brokers in a cost-effective, efficient, and impartial manner. An insurance broker is a person who has been granted a certificate of registration as an insurance broker by the Authority.
Procedure to File a Complaint with Insurance Ombudsman
The policyholder can lodge a complaint against an insurer and their agents or intermediaries. The complaint can also be filed by the legal heirs of the policyholder, nominee, or assignee.
The policyholder has to first write a complaint to the insurer who has to comply within a 30days period. If there is no response from the insurer within stipulated time period or if the complainant is not happy with the response, then he can approach the Office of Insurance Ombudsman appointed in his/her jurisdiction. The complaint shall be in writing duly signed by the policyholder or claimant. He should also submit a copy of the policy; repudiation/denial/partial settlement letter issued by the insurer; representation letter sent to the insurer; and any other correspondence exchanged with the insurer. He should also submit copies of all old policies for coverage of insurance since the last 48 months prior to the above policy if the claim is rejected on grounds of pre-existing diseases. The complainant can also file the complaint by way of electronic mail or online through the website of the Council for Insurance Ombudsmen.
No complaint before the Insurance Ombudsman shall be maintainable on the same subject matter on which proceedings are pending before or disposed of by any court or consumer forum or arbitrator. It is to be mentioned here that the complaint is to be filed within one year from the date of rejection or partial settlement of the claim by the insurer. The complaint can be filed for claims not exceeding 30 lakhs. There is no fee charged for filing a complaint with the Ombudsman.
Besides delay in response from the insurer, the Ombudsman can also consider complaints relating to the partial or total repudiation of claims by the insurer; misinterpretation of policy terms and conditions in the policy document; policy servicing related grievances against insurers and their agents or intermediaries; issuance of life insurance policy, general insurance policy including health insurance policy which is not in conformity with the proposal form submitted by the proposer; non-issuance of any insurance policy to customers after receipt of premium in life or general insurance including health insurance; and any other matter relating to violation of provisions of the Insurance Act, 1938 or regulation or instruction issued by the Insurance Regulatory and Development Authority of India from time to time. The Ombudsman shall act as a counselor or mediator in the above matters; finalize its findings and pass an award within a period of three months of the receipt of all requirements from the complainant. The award of the Insurance Ombudsman shall be binding on the insurers or the insurance broker, as the case may be.
Advice for Insurance Customers
First of all, before applying for an insurance policy, the customer needs to make sure that the policy covers coronavirus disease. The customer also needs to declare any preexisting ailments to avoid any contention later on. If the customer is getting treatment at home, then he should keep all daily medical records along with writings from a doctor which should clarify the reason for being treated at home. The insured person needs to understand that he won’t be reimbursed for hefty extra charges paid to arrange oxygen cylinders or equipment in shortage. Also, the insurer can deny reimbursement for any non-standard Covid treatment administered at home. In order to lodge a complaint with the ombudsman, the customer needs to keep a record of denial or partial settlement letter issued by the insurer; the customer’s complaint letter to the insurer; and other medical documents mentioned before. The customer should also go through the list of reference rates for Covid treatment available on the General Insurance Council website, before filing a complaint to Ombudsman.