Insurer slammed for ‘minimum hosp beds’ rule

The Navsari District Consumer Disputes Redressal Commission has ordered an insurance company to pay the entire hospital bill of Rs 4.38 lakh for a knee replacement surgery after rejecting the claim based on the hospital’s “minimum beds” rule. The commission criticized the state-run Oriental Insurance for misinterpreting its rules and using unethical practices to deny the claim.

The commission noted that when someone is suffering from a physical ailment, their priority is to receive treatment and recover, not to verify the hospital’s bed capacity. The patient, Girish Patel, had taken a medical cover of Rs six lakh for one year and underwent knee replacement surgery based on the doctor’s recommendation. However, the insurance company rejected his claim, citing that the hospital had fewer beds than the minimum requirement specified in the policy rules.

Patel approached the consumer court seeking reimbursement and compensation for mental agony. The insurance company argued that the hospital’s registration was under the Shops and Establishments Act, not the public health department of the municipality. However, Patel’s lawyer produced the certificate of registration with the Vijalpore municipality.

After hearing both sides, the commission stated that the insurer should prioritize protecting the consumer’s interests and should provide service in accordance with the premium paid. They emphasized the importance of following the IRDA rules while processing claims, but cautioned against rejecting claims based on unnecessary technicalities.

The commission also clarified that the condition of having a minimum of 10 beds in the hospital, cited by the insurance company, is optional and not mandatory. They concluded that the insurance company had misinterpreted the policy terms and engaged in unethical trade practices by denying the claim.