SHIVAMOGGA: The District Consumer Disputes Redressal Commission here has ordered Union Bank’s Thirthahalli branch to compensate a customer, H R Sridhar, for lapses in service that resulted in the rejection of his health insurance claim.
Sridhar had purchased a Jeevan Arogya policy from the LIC of India’s Thirthahalli branch, valid from November 24, 2012, to January 24, 2044. He authorised Union Bank to deduct the monthly premium through electronic clearing service (ECS) from his savings account on the 24th of every month and transfer it to LIC.
On January 30, 2020, Sridhar was hospitalised in Bengaluru due to a medical condition. After his treatment, he submitted medical records and bills to the LIC branch and sought reimbursement of the expenses. However, LIC rejected the claim, stating that the policy premiums had not been paid, rendering the policy inactive.
The commission reviewed evidence, including account statements, and found that Sridhar had sufficient funds in his bank account on the required dates. It ruled that Union Bank failed to deduct and transfer the premiums to LIC as authorised. This failure constituted a deficiency in service, the commission said.
In its ruling recently, the commission directed Union Bank to pay Sridhar Rs 1,00,000 as compensation for his medical expenses, along with 9% annual interest from February 7, 2024, to the date of the order. The bank must settle the amount within 45 days. If not, the interest rate will increase to 12% per year from the date of the order.
The commission dismissed the complaint against LIC, stating that the insurer was not at fault, as the non-payment of premiums was due to the bank’s failure. The order was issued by a bench comprising commission president T Shivanna and members Savitha B Pattanashetty and B D Yogananda Bhandya.