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Let customers know their rights: High Court to insurance regulators

The Bombay high court has directed the Insurance Regulatory and Development Authority (IRDA) to consider issuing appropriate instructions to all insurance companies to inform policyholders about remedies available to them in case of rejection or part-settlement of their claims.

A division bench of Chief Justice Mohit Shah and Justice BP Colabawalla directed the regulators also to consider asking risk firms to let policyholders know the reasons for its action on the claims.

The directions were given on Tuesday during the hearing of a public interest litigation filed by activist Gaurang Damani. The PIL seeks directions to bring clarity in medical insurance documentation so that the end consumer knows exactly what amount to expect from the insurance company in case of a claim.

During the hearing, Damani pointed out that a policyholder can approach the Grievance Redressal Cell of the insurance company concerned and thereafter file an appeal before an independent Ombudsman, but the existence of these forums is not known to the general public.

Damani had moved the HC two years ago, complaining about absolute lack of regulatory mechanism to govern the health insurance sector, although at that time about 5.5 crore people across the country had availed medical insurance and several thousand claims were pending settlement. After the high court's intervention, the IRDA has come out with a comprehensive regulatory mechanism governing medical insurance sector in India.

Article referred: http://www.dnaindia.com/mumbai/report-let-customers-know-their-rights-bombay-high-court-to-insurance-regulators-2044885

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