Sc Raps United India Over Refusal To Renew Policy

The Supreme Court today criticised the arbitrary action of United India Insurance Company in refusing to renew a Mediclaim policy because the policy holder had gone to the consumer forum against the company's refusal to pay the hospital expenses.

In this case, the government company refused to renew the policy because of the "past conduct" of the family.

The past conduct was that the family had gone to the consumer forum when it was denied payment of hospital expenses.

The judgement by Justice V N Khare and Justice Shivaraj Patil said the act of the insured to approach the consumer forum cannot be described as bad record, disentitling the insured from renewing the policy.

The insurance company, which assumes monopoly in the business, must act fairly and reasonably, the court ruled.

In this case, "arbitrariness is writ large in the action of the company," the judgment said.

The Calcutta High Court had directed the insured to take out a new policy. The Supreme Court set aside the order and said the insured was entitled to renew the old policy with its benefits, without any break. The company was ordered to renew the policy immediately.