Bank fails to mention exclusion clause in circular, to pay Rs 10k | chandigarh | Hindustan Times
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Bank fails to mention exclusion clause in circular, to pay Rs 10k

For failing to apprise retired employee about “exclusion clause” and misleading him to opt for mediclaim policy, the district consumer disputes redressal forum, Chandigarh, directed Indian Overseas Bank to pay Rs 10,000 as compensation for deficiency in services.

chandigarh Updated: Dec 16, 2013 21:27 IST
Shailee Dogra

For failing to apprise retired employee about “exclusion clause” and misleading him to opt for mediclaim policy, the district consumer disputes redressal forum, Chandigarh, directed Indian Overseas Bank to pay Rs 10,000 as compensation for deficiency in services.


The bank had also been directed to pay Rs 1.6 lakh to complainant NR Chauhan, a resident of Manimajra, with 9% interest, along with paying Rs 7,500 as litigation cost.

Chauhan is a subscriber of Indian Overseas Bank Retired Employees Medical Assistance Scheme (REMAS) that provides financial assistance to retired employees of the bank to meet their medical expenses.

Chauhan said the bank had introduced a new group health insurance scheme with Universal Sompo General Insurance Company Limited for REMAS members and he opted for it.

According to the scheme, the limit of the coverage per family was Rs 1.5 lakh, covering self and spouse, and was implemented from July 2012.

The complainant had spent a sum of Rs 3.2 lakh on his wife's knee replacement. Under the scheme, 50% amount was to be paid by the complainant.

Chauhan said his wife underwent knee replacement in December 2012, but the mediclaim was rejected saying that the waiting period for the ailments of joint replacement due to degenerative conditions and the age related osteoarthritis and osteoporosis was three years under the policy.

Indian Overseas Bank in its written statement contended that the complaint was not maintainable against it because it was only the facilitator-cum-intermediary of the policy and not a service provider. The bank justified the repudiation of the claim as per terms and conditions of the policy.

The forum presided over by PL Ahuja in its order dated December 12, held, “If there was any exclusion clause as mentioned in the insurance policy, it should have been clearly mentioned in the circular of the bank instead of alluring the subscribers that there were add on benefits relating to coverage of the pre-existing diseases and waiver of exclusion of first year and waiting period of 30 days. Had the complainant been not misled by the bank circular, he would not have opted for the medical insurance by paying a subscription fee (premium) of Rs 15,750.”