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On more than one occasion, Justice D. P. Wadhwa, former President of the apex consumer court, had commented on the large number of insurance cases filed before the consumer courts by commercial establishments and had remarked that he sometimes felt he was presiding over an insurance tribunal. Things have not changed since. If anything, the number of complaints being filed before the consumer courts against insurance companies has gone up, particularly after the apex consumer court’s decision to keep its doors open to businesses too to agitate their complaints against insurers. Following consumer representations that cases filed by large business houses against various service providers, including insurance companies, electricity boards and banks, were taking up considerable time of the consumer courts, thereby affecting the consumer justice system meant for individual consumers, the government in 2003 amended the law and excluded from the purview of the courts, complaints against services filed by businesses. However, the apex consumer court’s interpretation of this amendment was that it did not exclude complaints against insurers. The National Consumer Disputes Redressal Commission, headed by Justice M.B. Shah, was of the view that the amendment had excluded from the purview of the courts, services hired for "commercial purpose". So in order to attract the exclusion clause, such a service should have been hired directly for making profit, which is the mainstay of any commercial purpose. Since an insurance policy is taken only to cover losses and not to generate profit, it would not come under the definition of "services hired for commercial purpose". The amendment therefore did not prevent companies from filing their complaints against insurers, the Commission said (FA Nos 159, 160 and 181 of 2004). This once again threw open the doors of the consumer courts to complaints fielded against insurance companies by businesses and commercial establishments. Now the apex consumer court feels that the number of cases filed against insurance companies before the consumer courts can come down considerably, if only insurance companies set right their process of claim settlement. So about a month ago, when the apex consumer court called a meeting of presidents of state commissions and secretaries handling consumer affairs, it decided to invite executives of insurance companies too to discuss this issue. And for once, insurance companies did not have the support of their standing counsel to argue their case before the presiding members of consumer courts. The apex consumer court was quite clear as to where improvements were needed. For example, it said (1) insurance companies should make every effort to settle claims within the specified period (as stipulated by the Insurance Regulatory and Development Authority — IRDA — in its Regulation on the Protection of Policy Holders’ Interests) and not delay the claim settlement; (2) insurance companies should desist from appointing more than one surveyor to assess loss, as that unnecessarily delayed the process of settlement and caused harassment to the consumer; (3) once the surveyor submits the report, there should not be any delay in settling the claim; (4) the terms and conditions stipulated in the policies should be clear and unambiguous; (5) the apex consumer court also wanted the disputes over pre-existing diseases to be minimised in health claims and felt that to a considerable extent, getting the applicant to go through some medical tests at the time of issuing the policy could be helpful. The National Commission was also critical of the fact that insurance companies filed appeals before the Supreme Court against the orders of the National Commission even for petty claim amounts, thereby causing harassment to consumers. In short, the apex consumer court said it wanted the insurance companies to comply with the guidelines issued by the IRDA for the protection of policyholders, and also ensure prompt settlement and payment of insurance claims, so that consumers are not inconvenienced and forced to file complaints before the consumer courts. The insurers were in for more criticism from several eminent personalities invited to speak at the conference. They blamed the insurance companies for delays in sending policies, cover notes, appointing surveyors, in taking decisions on claim settlements, for formulating terms and conditions that are not easily understood by policyholders, for not giving the report of the surveyor, for repudiating claims without assigning proper reasons, for not providing a proper in-house complaint redress mechanism and for not following IRDA’s guidelines. Conferences such as this should force the insurers to improve their services vis-a-vis policyholders. And if that happens, one can see a reduction in the number of complaints filed before the consumer courts.
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