The Bombay High court on Friday directed the Insurance Regulator and Development Authority (IRDA) to issue guidelines to Insurance companies to come out with a pre-packaged compensation for 42 ailments covered under medical insurance on the basis of the sum insured and on the type of the hospital.

A bench of Chief Justice Mohit Shah and Justice M. S. Sancklecha gave the direction to IRDA to include such guidelines in the regulations framed by it four months ago.

The court observed “IRDA has only given powers to the insurance companies to settle claims.”

The Court asked IRDA to come out with such guidelines within four weeks. Besides, these guidelines have to be put up on the insurance company website so that the insured and the Third party Administrator (TPA) would get a fair idea of how much they are entitled for, the bench said.

These directions were given during the hearing of a PIL filed by social worker Gaurang Damani detailing hardships faced by Mediclaim policy holders.

Petitioner Gaurang Damani submitted that “there have been instances where patients, who have undergone the same kind of treatment at the same hospital, have been disbursed different insurance amounts. If pre-packaging is made available, then the insured can also choose the kind of hospital in which he wants to be treated,” he contended.

The court has also directed IRDA to include in the guidelines a clear message that TPAs can only recommend a claim amount but cannot settle it.

“It is the insurance company who is to settle the claim and for that a detailed guideline should be issued in the regulations which have been issued by the IRDA four months back governing the insurance companies while settling claims.

Mr. Damani said that as per the IRDA affidavit filed last year, there were six lakh health insurance claims pending which amounted to around Rs. 1,200 crore. He added this is because the TPAs were doing the settlement and not the insurance companies.

The court has adjourned the hearing to next month.

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