Delhi Consumer Commission Pulls Up United India Insurance for “Negligent” Handling of Floater Policy, Orders Retrospective Renewal

The District Consumer Disputes Redressal Commission-I (North District), Delhi has held United India Insurance Co. Ltd. guilty of deficiency in service for failing to address a policyholder’s request to continue a family floater mediclaim policy after the death of one insured member and for not adjusting excess premium collected.

The complaint was filed by Kamal Bhatia under Section 12 of the Consumer Protection Act, 1986, concerning a Family Medicare (floater) policy covering his parents since 2013. The policy, with a sum insured of ₹5 lakh, had been regularly renewed without any break.

After the death of his father, R.C. Bhatia, on 15 December 2016, the complainant sought continuation of the policy in the name of his mother alone. At the time of renewal in 2017, officials of the insurer allegedly advised him to pay the full premium, including for the deceased member, assuring that the excess amount would be adjusted later. Acting on this assurance, he paid the entire premium for 2017–18.

However, when renewal became due in 2018, the insurer refused to convert the floater policy into a single-member policy and instead insisted on shifting to a senior citizen individual policy. The complainant also alleged that his request to renew his separate individual policy was denied on the ground that both policies were interlinked. Despite repeated communications, the insurer neither responded nor renewed the policy, leaving his elderly mother without health insurance coverage.

The insurer, in its defence, denied any deficiency and raised objections including alleged suppression of facts and non-submission of medical records. The Commission, however, found these submissions irrelevant, noting that the dispute did not relate to any death claim. It observed that the reply filed by the insurer appeared to be “confused” or copied from another case, reflecting a lack of application of mind.

After examining the record, the Commission held that the insurer failed to renew the policy despite repeated requests and did not proportionately reduce or adjust the premium after the death of one insured member. It concluded that the insurer handled the matter in a negligent manner, causing harassment and mental agony to the complainant.

Allowing the complaint, the Commission directed the insurer to renew the Family Medicare policy retrospectively in the name of the complainant’s mother without any break and with continuity of benefits. It further ordered adjustment of excess premium collected and directed payment of ₹1,00,000 as compensation for mental agony along with ₹21,000 as litigation costs.

Cause Title: Kamal Bhatia v. United India Insurance Co. Ltd. & Ors.
Case No.: Consumer Complaint No. 54/2019
Coram: Divya Jyoti Jaipuriar (President), Ashwani Kumar Mehta (Member), Harpreet Kaur Charya (Member)