New India pays penalty for not renewing the health insurance policy

The Hindu ,has carried the following news item.

The Madras High Court has imposed a fine of Rs.10, 000 on New India Assurance Company for refusing to renew insurance policies of a septuagenarian couple because their son had shifted the policies of other, relatively young, family members and his employees to a private insurer. Dismissing a writ appeal filed by the company before the Madurai Bench, a Division Bench, comprising Justice A. Kulasekaran and Justice P. Murgesen, said such arbitrary denial would defeat the objective of medical claim insurance policies. On the appellant’s contention that nobody would take the “risk” of insuring aged persons in the wake of stiff competition between public sector and private insurance companies, the Judges said: “It is immaterial whether a government company is having monopoly or not, but arbitrariness should not appear in their actions and decisions.” Concurring with S. Srinivasa Raghavan, counsel for the insured, the Bench said the reason cited for not renewing the policy was invalid and contrary to basic principles of insurance law.


We in www. healthinsuranceindia.org feel that New India ,the largest insurance company of our country should look at renewal of such policies with a liberal view and should get the goodwill of the masses.They release ads in print media and spend crores of Rupees but do not realize that one such judgement against them and being covered in a reputed paper The Hindu brings down the brand equity of New India.