Govt Circular Can't Curtail Insurance Coverage, Insurer To Pay Balance COVID Claim: Delhi HC

The Delhi High Court has ruled that a government circular issued during the COVID-19 pandemic, regulating hospital charges, cannot be construed as limiting the contractual obligations of insurance companies towards their policyholders.
Justice Sachin Datta made the observation while directing United India Insurance Company Limited to release the balance amount to petitioner Reena Goel, whose Covid-19 hospitalisation claim was only partly reimbursed despite being within the insured coverage.
The non-release of the deficit amount is clearly unjustified and contrary to the clarification/s issued by IRDAI, the court noted.
The Court noted that the Delhi government's June 20, 2020, circular was intended to regulate the fees hospitals charged patients for Covid-19 treatment, rather than to reduce the reimbursement payable under insurance policies. 
The position, the Court emphasised, had already been clarified by the Insurance Regulatory and Development Authority of India (IRDAI) through circulars issued in January and April 2021.
The petitioner was represented by advocates Rakshita Goyal, Sanyam Gupta, Aditya Goel, Anju Bhushan Gupta, and Ankita Chaudhary. 
On the other side, Abhishek Nanda, Hrishika Rawat, and Sourabh Singh appeared for IRDAI (respondent no.2)
Goel had been admitted between December 4 and December 18, 2020, and incurred expenses of ₹3,56,295. Although she was covered under a ₹3 lakh base policy and an additional ₹3 lakh "Super Top Up Medicare Policy," the insurer reimbursed only ₹1,75,340, citing the Delhi government's circular.
Finding the insurer's reliance on the circular unjustified, the Court held that the deficit payment was contrary to IRDAI's clarifications and the past conduct of the insurer in similar cases. It directed United India Insurance to settle the balance claim within four weeks. 

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