According to a report in the Times of India, the consumer affairs department has written to the finance ministry in this regard, citing numerous cases in consumer forums and thousands of complaints of misselling. The department is seeking a change in rules to ensure that the terms and conditions, or at least a summary, are clearly explained to avoid disputes arising from a lack of proper communication.
In the letter, consumer affairs secretary Rohit Kumar Singh has highlighted that the root cause of disputes often lies in inadequate communication, with consumers complaining that they are only informed about the positive aspects of the policy when purchasing insurance. However, the final decision on this matter rests with the Insurance Regulatory and Development Authority of India (IRDAI), which is responsible for setting the rules.
Singh has also pointed out that insurance policies often use ambiguous language in their terms and conditions, making it difficult for consumers to understand them. To address this issue, he has proposed that insurance policies be framed in regional languages to cater to the rural population of specific areas. Additionally, Singh has suggested that policies clearly state the inclusions and exclusions in a more explicit manner. Currently, policyholders are often informed about exclusions when they apply for claims, leading to confusion and potential litigation.
Justice Amreshwar Prata Sahi, the President of the National Consumer Disputes Redressal Commission, has made another recommendation regarding the rejection of medical claims by hospitals. He suggests re-examining and amending the clause that requires a policyholder to be hospitalized for at least 24 hours for surgery or treatment. With advancements in medical procedures that allow for shorter hospital stays, the clause needs to be updated accordingly, according to Singh’s letter reviewed by TOI.
