New India Assurance admitted that a software glitch resulted in overcharging mediclaim premium, but has dragged its feet on providing information. It now says that it gave a wrong date for refund eligibility on its website. New India’s mantra seems to be “If you cannot convince them, confuse them”

For the last 40 months New India Assurance has tried hard to stall Anant Meghji Nandu, who blew the whistle on New India overchanging of certain policyholders. Instead of coming out clean, the insurer’s actions have clearly spoken on their intent to suppress information over a long period of time. The credibility is lost even with Central Information Commissioner (CIC) who is not convinced with the numerous contradictory arguments from the insurance company.

Read Did New India Assurance overcharge lakhs of mediclaim policyholders? - I

New India Assurance started by denying any information or refund until a RTI (Right to Information) application was filed by Mr Nandu. In a follow-up RTI, he asked information about how many mediclaim policies were due for refund and how many were actually refunded, but was told by New India Assurance Central Public Information Officer (CPIO) that the information is not available in “material form”. At the CIC hearing in 2009, the insurer admitted to overcharge, but argued that the information on policyholders was not available and that voluminous data was difficult to gather from offices all over the country.

The CIC order on 11 June 2009 said, “I do not find the averments of the respondents at all convincing. Even if the information requested is a detailed one and voluminous, there can be no reason to withhold it as there is public interest in its disclosure.” The CIC gave the insurer 90 days to get the required data.

In compliance with the order of CIC, the company has said that with effect from 29 May 2008, out of 30,187 policyholders to whom the refunds were due, it has given refunds to only 3,534 policyholders, that too without interest. The insurer had downplayed the issue by changing the date (29 May 2008) for refund eligibility without realizing its own folly about divulging the real date (16 August 2007) to Mr Nandu as an RTI reply in the past.

At the CIC hearing on 12 April 2012, New India Assurance admitted the date of eligibility for refund as 16 August 2007 for policyholders of age 60 years & above and 10 April 2008 for policyholders of age 50 years & above.  

The CIC decision of 12 April 2012 stated, “Commission finds it difficult to accept the explaining away of this variance by the respondent CPIO in the actual date of reduction/revision of premium rates and the date posted on the website by stating that the automated system of accounting used by the company had automatically revised the rates of the mediclaim of receipt holders and refunded the excess payment. Respondent has not been able to provide any explanation as to why they have declared 29 May 2008 and not 16 August 2007 as the effective date for reduction/revision of the premium rates for renewal of mediclaim policies.”

When Moneylife contacted New India Assurance, there seemed to be another twist to the long saga. According to a senior official from the company, “We put the incorrect date of 29 May 2008 instead of 16 August 2007 on the website along with the correct data of 30,000 odd policyholders’ that are supposed to get refund. We have issued circulars to all our offices to advise them on paying refund or adjusting against renewal premium.”

Again, the intention seems to be to admit that only 30,187 policyholders’ are affected. Can anyone believe that across India only 30,187 policyholders (age 50 and above) renewed their New India Assurance mediclaim policy in a period of nine months? The mantra seems to be “If you cannot convince them, confuse them”.

In the CIC hearing this month (decision notice awaited), New India Assurance has been told again to come up with correct information of the policyholders that are eligible for refund and to give information on how many have really been refunded or adjusted against renewal.

Realizing the gravity of the case, New India Assurance officials have been travelling from Mumbai to New Delhi for CIC hearings instead of video conferencing from Old Custom House in Mumbai, which the complainant Mr Nandu has been availing of. This is as good as wasting of public money by a public-sector company. If only the insurance company could make necessary amends to amicably solve the issue.

In our third part of the story we will report on the Insurance Regulatory and Development Authority’s (IRDA) actions or rather inactions on this extraordinary case so far.