SC reminds PSUs in insurance sector of their social obligations

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Delhi, May 23 (UNI) The Supreme Court has reminded the state-owned public sector undertakings(PSU) of their social obligations while strongly condemning the increasing tendency among the insurance companies to deny the renewal of mediclaim policies of elderly persons/senior citizens.

A Bench comprising Justices S B Sinha and V S Sirpurkar while dismissing the appeals of insurance companies, took a dig at the government slogans 'health for all' policy and disappointing ground realities.

Justice Sinha, writing the judgement for the bench, asked the Insurance Regulatory and Development Authority to lay down clear and uniform guidelines which would be applicable to all the players both in public sector as well as in private sector.

The apex court in its judgement said, '' On one hand we can not forget the new market economy and the foreign direct investment, but on the other hand, we also can not shut our eyes to the ground realities.

There is a huge gap between the high sounding words of the government and the realities on the ground.'' The court while accepting the contentions of the government that onerous conditions could not be binding on one player, disadvantaging it in a free market economy, at the same time made it clear that PSUs have to share the commitments made by the government for social welfare.

An annoyed apex court pulled up the insurance companies for demanding exorbitant rates of premium from the senior citizens for renewing their mediclaim policies and also insisting on excluding diseases which require frequent hospitalisation.

The petitioner had challenged a Gujarat High Court ruling which had gone against the arbitrary refusal of public sector insurance companies to renew the mediclaim policies of three elderly persons despite the fact that they had paid the renewal premium as per the demands of the insurer.

In the first case, the insurance companies demanded 300% increase in the premium and when the old man agreed to pay for renewal of his mediclaim policy, the company insisted for exclusion of his heart ailment from his insurance cover.

In the second case, a neurologist was also subjected to similar treatment and in the third case the policy was abruptly cancelled and the policy holder was told to approach some other company for mediclaim policy.

Solicitor General G E Vahanvati pleaded before the court that since the insurance sector had already been opened to private sector, the public sector companies can not be subjected to the conditions of social welfare alone while leaving the private players untouched.

The court concluded by observing that government supported companies must be fair and reasonable in all their actions including renewal of mediclaim policies.

UNI SC RC US1854

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