Insurer must reimburse diabetes patient cost of glucometer test strips under mediclaim

Diabetics, especially those who are insulin dependent, have to monitor their blood sugar before every shot of insulin, to determine its correct dosage.This requires a glucometer and test strips, which are quite costly. Can the insured recover the cost under a mediclaim policy?
Case Study: Purvi Kamlesh Shah and her daughter were covered under a mediclaim policy issued by New India Assurance. The policy was first taken in 2005 and then renewed without any break. However, while renewing the policy with continuity, a fresh proposal form had been obtain in 2008.

During the tenure of the renewed policy from March 13, 2010 to March 12, 2011, Purvi had to be hospitalized on July 13, 2010 due to fluctuating blood glucose levels. After she was discharged on July 16, 2010, she lodged two claims, one for the hospitalization expenses of Rs 55,409 and the other of Rs 7,680 towards medicines. The insurer’s TPA, MD India Healthcare Services settled the claims at Rs 47,931 and Rs 3,680 respectively. The deductions were in respect of expenses incurred on purchase of glucometer strips to check the sugar levels. The reason for disallowance was that these were considered as “nonmedical expenses“, and so were not payable under the policy .

Purvi protested against this disallowance, but New India’s Grievance Cell failed to respond to her representation. She filed a complaint before the South Mumbai Forum through the Consumers Welfare Association and sought a direction to reimburse these expenses along with interest and also claimed compensation and costs.

The TPA as well at the insurer contested the case and claimed that the amount had been correctly computed. They claimed that Purvi was not entitled to dispute the amount after having accepted the claim in full and final satisfaction.

The forum observed that the policy conditions had been changed, so a fresh proposal had been taken in 2008. So the new terms under the revised policy would be applicable, which provided for limiting the claim on the basis of the room category. The forum concluded that there was no deficiency in service and dismissed the complaint. Purvi challenged the order, but her appeal was dismissed by the Maharashtra State Commission. Purvi then questioned the orders in revision. The National Commission noted that various clauses of the policy providing for certain exclusions had been inserted in the Mediclaim Policy (2007). The Commission observed that it was beyond comprehension how any claim for medicines could vary with the room category opted for, as medicines treatment would be the same regardless of the room category .

The Commission pointed out that glucometer strips are essential for a diabetic to monitor blood glucose levels and adopt a medical regime to prevent the consequences of elevated or declined blood sugar levels. So it would be wrong to consider the expense on the test to be nonmedical expenses. The deduction of Rs 9,350 on this pretext was held to be wrong.

The National Commission’s bench comprising of justice D K Jain, along with M Shreesha, held the TPA and the insurance company jointly liable to pay the cost of the test strips amounting to Rs 9,350 with interest at 9% from the date of filing of the complaint. Six weeks time was given for compliance of the order. In addition, costs of Rs10,000 were awarded to Consumers Welfare Association for espousing the cause of the consumer.

(The author is a consumer activist and has won the Govt. of India’s National Youth Award for Consumer Protection. His email is jehangir.gai.columnist@outlook.in)

Jehangir B Gai

ePaper, The Times of India (Bombay), Oct 30 2017, Page 7 :
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Burglary Insurance: Absence of Force Will Mean No Burglary Claim

A Supreme Court (SC) judgement on a theft claim filed by a public sector unit in Odisha states, “In the absence of violence or force, the insured cannot claim indemnification against the insurance company. The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy, we cannot take liberalism to the extent of substituting the words which are not intended.” It is based on another 2004 SC judgement. The new SC judgement is clear that the terms of the policy are sacrosanct; it can’t be subjected to interpretation. The liability of the insurer would depend strictly on the policy conditions.
Home insurance, travel insurance, commercial insurance, etc, may cover ‘burglary’ and not ‘theft’. For a layman, both seem to be same. ‘Burglary’ is theft that has to be accompanied by forced entry, violence, or threat of violence. ‘Theft’ may not have a forceful or violent entry to cause a loss to residential or commercial property. It can even be an insider job by an employee or a family member.
Your case may fall under a long list of exclusions, or the semantics of the policy, which differentiates between ‘theft’ and ‘burglary’. Burglary is the criminal offence of breaking into and entering a building illegally for the purpose of committing a crime. On the other hand, theft is the act of stealing; the wrongful taking and carrying away of the personal goods usually without force. If the home insurance policy excludes burglary and covers only theft, then you are at a disadvantage. What about theft or burglary while travelling?
Moneylife had written about the case of Cox & Kings (C&K) tourists being robbed in a bus in Italy which was not covered by the insurer. (Read http://tinyurl.com/hcojgq9). It helps to clarify what is burglary versus theft which is applicable to home as well as travel insurance. While buying travel insurance, customers hardly know what is really covered.
http://www.moneylife.in/article/burglary-insurance-absence-of-force-will-mean-no-burglary-claim/48437.html

6 Mediclaim Blunders To Avoid

Warning:You may be denied your claim even though you may have done nothing wrong

Financial planners tell customers to buy mediclaim of Rs5 lakh or more, to be covered adequately. While this is, indeed, good advice, planners do not tell customers about the shortcomings in the product itself which can mean that your claim may not be fully paid. Product drawbacks, like room rent limits or procedure sub-limits, can lead to partial claim settlement and reduced compensation claim amounts, about which you can try to get informed from the policy wordings. But what about things which are not defined in the policy but can still render the mediclaim useless? There could be complete rejection of claims, for no fault of yours.

You can only control what you know; but most of us cannot anticipate the various conditions which can lead to claims denial. We are highlighting some of the cases which we came across from Moneylife Foundation Insurance Helpline or emails received from Moneylife readers. Avoid the pitfalls which no financial planner or insurance advisor will tell you about. Nor can these be known from studying the mediclaim policy document.

Mediclaim is not a simple product. It’s not a product you can purchase and forget about. It is a product which will keep you on your toes. Unfortunately, insurance fraud is a reality and insurers’ steps to counter it may adversely impact an innocent policyholder. Read on to avoid blunders that can lead to rejection of claim or, even worse, make your mediclaim policy worthless. There are no easy solutions for some cases and even your best efforts for a fair claim can be met with unfair rejection by insurers.

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ASCI upholds complaint against Bajaj Allianz false advertising


The Truth about New India Assurance’s top-up policy

Newspapers have claimed that New India Assurance’s newly launched top-up policy is the cheapest. These articles assert that you can even do cosmetic surgery and claim the amount over the deductible, for expenses covered by mediclaim. Here is the truth

New India Assurance (NIA) has launched a top-up plan, which is being hailed by few newspapers like the Times of India (ToI) and Economic Times (ET) as the cheapest product available. This is incorrect. The NIA top-up plan is not the cheapest and it is more expensive than super top-up products which are a better option.

The ToI article states – A unique aspect of NIA’s cover is that for the threshold limit to be reached, all hospitalization expenses are taken into account irrespective of whether the expenses would qualify as an insurance claim. This means that the insured can spend Rs5 lakh on a cosmetic surgery (which is not covered under mediclaim) and recover any additional health expense (covered under mediclaim) under the top-up plan. This is absolutely incorrect information. Moneylife wrote about the discrepancies to New India Assurance, but there was no response till the writing of this article. In fact, there is no health insurance product that covers cosmetic surgery.

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Reliance Life’s murky business alliances and practices

Moneylife » Reliance Life’s murky business alliances and practices

Multi level marketing, business from unlicensed entities, dubious corporate agents, licensed advisor signatures forged, foreign tour packages, huge payments for contests, lead generation agreement violation, excessive payments for dissemination of information and much more in IRDA order

Reliance Life Insurance Company (Reliance Life) is facing the heat from Insurance Regulatory and Development Authority (IRDA) for several violations leading to Rs1.77 crore penalty. IRDA order has 47 charges along with decision on each one, but there is no mention about the glaring corporate agent AB Capital fraud selling of policies with “interest free loan of 10 times premium”. IRDA did come up with charges which showcase Reliance Life’s murky business alliances, payouts and dubious business practices. IRDA order shows serious lapses in Reliance Life and hence the insurer cannot claim to be a victim of fraudulent selling.

Moneylife has consistently maintained that insurance policies are logged by valid entities and hence insurer needs to trace the relation between fraudulent sellers and the valid entity logging the sale.

Here are highlights of IRDA order:

Multi level marketing and unlicensed entities: Business is sourced from unlicensed entities through Multi Level Marketing (MLM) and was logged into the code of licensed entities. Business was procured by forged signatures/without signatures at the space specified in the agents confidential report column. There are instances wherein signature of IRDA licensed advisor specified persons is either forged or not available. There are cases of business being sourced through unlicensed entities but booked under broker code of Net ambit Insurance Broking India Ltd.

Life Insurer is associated with V-Care Life involved in MLM and is getting business logged in the name of some of the agents. It was also observed that some of the Channel Development Associates (CDAs) are indulging in MLM through the agents mapped to them and no systems are in place to verify the details of agents that sourced the proposals. Mutyala Getwin Online Marketing Private Limited is doing insurance business in multilevel marketing model.

Leads obtained and payments are made to the various corporate agents based on agreements and in the process unlicensed entities solicited insurance business was logged into various code numbers of ‘Reliance Third Party Distribution Channel’ which is one of the new business verticals of the insurer.

Corporate agent Pinnacle Insurance Agency is engaged in MLM activities. They offer high value gifts to its distributors and the criteria for award winning are also published on their website. Corporate agent admitted to involvement of two of its employees in the multi level marketing activities. IRDA observed that the life insurer has failed to monitor the activities of the corporate agent. This is considered as a serious lapse and hence Reliance Life is told to investigate into the manner in which the corporate agent is soliciting the insurance business and submit actions initiated within 30 days from the date of the order.

Reliance Life’s drive against fraud callers – Will it take action against its corporate agent AB Capital?

Is Reliance Life’s corporate agent AB Capital involved in fraudulent “interest-free loan” offers? Will Reliance or the regulators initiate action?

Contests and foreign tour packages: Extra payouts were made towards contests, apart from commission, to some individual agents. Instances are noticed where payments other than eligible commission/ brokerage were made to corporate agents and brokers in the name of contests and other related activities. Further expenses towards foreign tour packages were also incurred, Rs71 lakh during 2010-11 and Rs1.03 crore during 2011-12, on some of the brokers and corporate agents. During 2010-11, huge payments of Rs12.82 crore were made towards “Referral Fees –Contests” against referral fee of Rs1.27 crore.

Lead generation agreement violation: An amount of Rs168.70 crores during 2010-11 and Rs45.21 crores during 2011- 12 (up to Dec 2011) were paid to various entities towards marketing and publicity. Significant amounts were paid to various entities towards “Marketing Activities”, “Dissemination of information” and “Generation of Leads” during the years 2010-11 and 2011-12. Dissemination charges of Rs74.89 crores were paid to about 641 entities during 2010-11and Rs35.31 crores to about 131 entities during 2011-12 (up to December 2011). Service Agreements entered revealed that these entities were engaged for lead generation and dissemination of information. IRDA order states that entering into service level agreements and making payments for lead generation and dissemination of information is not permitted even before IRDA (Sharing of Database) Regulations, 2010. Only Banks were allowed to be entered into referral agreements. Payment of significant monies for an unskilled job of distribution of publicity material under the guise of ‘Dissemination of Information’ is questionable.

Advertisements violation: In respect of product Reliance Premier Life, instances (Unique Ad id No: Mktg/sales pitch/version 1.0/August 2009, Mktg/poster/version 1.0/August 2009 and Mktg/hoarding/version 1.0/August 2009) were found where Advertisements filed with IRDA are different from that were issued to the public.

The advertisements bearing numbers Mktg/RTSIAP – Brochure/ version1.0/ November 2009, Mktg/RTSIAP-Brochure/version 1.1/April 2010 were not filed with the authority and are also not appearing in the advertisement register.

Anantha NarayananSivaraman Anant Narayan

RAJ PRADHAN | 17/04/2014 06:09 PM

Read more and links at :

http://www.moneylife.in/article/reliance-lifes-murky-business-alliances-and-practices/37096.html


LPG cylinders come with R 40 lakh risk cover

While most us know how to avoid accidents, few know that we have Rs. 40 lakh risk cover in case of damage due to cylinder explosion!

In fact, companies have not seen a single insurance claim from Jaipur in years. Given the level of awareness, it’s not a surprise.

Customers unaware Most homemakers were completely shocked when DNA told them about the insurance cover available on LPG cylinders. “I never knew that such damages could be claimed from the gas agency,” said Varsha Singh.

Leave alone simple homemakers, even well-read professionals seem to have little clue of this “hidden benefit”. “I did not know that we get insurance in case an LPG cylinder explodes. 

The staff at the gas agency never informed me,” said Amit Agarwal, a chartered accountant who recently got a gas connection.

Ignorance pays only the insurers Every month, nationalised insurance companies get lakhs of rupees as premium and this amount increases constantly with an ever rising number of ignorant consumers, each of whom are covered in part by the Oriental Insurance Company and the gas agency concerned.

“We received Rs26 lakh as monthly premium from a single gas agency in Jaipur, a city which has more than 400 gas agencies,” an agency owner said.

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