Fake Claim May Invite Police Action

Filing a fraudulent health insurance claim may land a policyholder in the police’s crosshairs. Setting a precedent, New India Assurance Company Ltd has cancelled about 30 mediclaim policies in last six months, after internal investigation revealed that these policyholders were paid for bogus claims. Company is also considering registering First Information Report (FIR) against the policyholders and colluding agents for forgery and cheating.
As per New India Assurance it has started canceling policies of policyholders who have breached its trust and a show-cause notice has been issued to them to explain their stand. If they fail to give convincing reply, the policies were revoked. The policyholder’s deceptions ranged from fraud to misrepresentation and suppression of facts.

And there are also signs that other public sector general insurers may also emulate New India Assurance’s suit and cancel policy instead of just repudiating false claims.
Insurers have right to take these steps as these steps are within the ambit of law.
As per insurers, severe punishment has been necessitated by the adverse claim ratio that the public sector insurers suffer. Statistics show that in 2010-11 all four public sector general insurers paid more claims than earned premiums.

As per experts, it will be difficult for penalized policyholder to switch to a different insurer’s plan since no company would like to offer services to policyholders with bad track record.
Of all the mediclaim claims received by insurers about 25-30% are manipulated and of these 10% are outright fraudulent. Due to this industry loses Rs 500 crore every year.