Friday, May 25, 2012

Should the officer of claim department pay penalty of Rs.15, 000?

A district consumer forum has ordered New India Assurance Co. Ltd. in May 2012 to pay a policy-holder Rs.60, 000 for refusing to reimburse expenses incurred on hospitalization.

Shiv Kumar Gupta had spent Rs.45, 252 on his son’s hospital stay in 2010. The district consumer disputes redressal forum has ordered the company to reimburse the amount and also pay Rs.10, 000 as compensation for “harassment’ and “mental agony” and Rs.5, 000 as litigation cost.

The insurance company refused to pay claim by taking stand that Gupta had not provided all documents. Gupta informed the third party administrator of the company of his son’s hospitalization on December 7, 2010 and had submitted all the documents. He was told his claim was being processed. The company later rejected it arguing that doctor’s prescription slip and IPD paper were missing.

“Despite the fact that the insurance company has received the policy premium when the benefits were required to be extended to the complaint / family members it closed the claim without valid reason,” said the forum. Therefore judgement was passed for payment of Rs.60, 000

 The Question before us is

“Should the officer of claim department or the branch manager be asked to pay penalty of Rs.15, 000 out of his salary?

Why should the company be penalized for payment of Rs.15, 000?

Comments are invited.

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