The following policyholders have taken medical insurance from different Public Sector insurance companies as per details given below : Bhima Singh obtained the mediclaim policy from the XXX General Insurance Co. Ltd. in

In all these cited cases, the insurance companies are not justified in refusing to renew the insurance policies. The insurance companies have their obligations not only in terms of the constitutional provisions but also the provisions of the Insurance Regulation Act, 1938, the Indian Contract Act, 1972, and the Insurance Regulatory and Development Authority Act, 1999. As per these Regulations framed thereunder and the guidelines issued, the companies are bound to renew mediclaim policies from time to time on the same terms and conditions. The right to cancel the policy and refusal to renew the same must be held to be confined only to the exclusionary clauses contained in the policy. The functions of the appellant i.e. the insurance companies are regulated by statutory guidelines and circulars issued from time to time, any departure therefrom must be held to be wholly unfair and mala fide. A renewal of Health insurance policy cannot be denied by an insurer on the following grounds: High incidence of claims by the customer, except in the case of benefit-based health insurance policies issued by Life insurance companies, where the Policy itself comes to an end upon payment of say, a Critical illness claim, as per terms and conditions of the Policy. On the grounds of age, if the Customer has renewed the Policy without any break. However, renewal of Health insurance policy can be denied by the insurer, if fraud or misrepresentation on the part of the Customer during the previous Policy period or non-cooperation by the customer. Under individual policies, where the Policy is renewed by the Customer, extra premiums cannot be charged only based on the unfavourable claims experience in the said Policy and, instead, shall be based on increase or decrease in premium for the entire portfolio. No fresh medical examination can be called by the Insurer at the time of renewals, provided the Customer has renewed the Policy without any break. However, if there is any favourable factor for the Customer, viz., reduction in the risk profile of the Customer, loadings in premiums shall be considered for reduction by the Insurer. As per the provisions of the Act, the policyholders have these options under the existing mediclaim insurance policy to continue the cover by payment of renewal premium in time in respect of the sum insured: In case of Bhima Singh , there was a renewal without break in the period. Hence the mediclaim insurance policy will be renewed without excluding any disease already covered under the existing policy which may have been contracted during the period of the expiring policy. Renewal of mediclaim insurance policy cannot be refused on the ground of high claim ratio or that the insured had contracted disease during the period of the expiring policy so far as the basic sum insured under the existing policy is concerned. Also, the insurance company cannot charge loading on the basis of past history of claim at the time of renewal. In case of Rajesh where the insured seeks an enhancement of the amount of sum insured at the time of renewal, the option to renew will not extend to the amount of such enhancement and renewal in respect thereof will depend upon the mutual consent of the contracting parties. Alternative Answer (for Rajesh): In case of Rajesh, the conduct of insurance company is not justified. The insured within the validity of policy handed over the cheque for renewal but the policy is not renewed within time. The insurance company is also not justified for seeking 300% loading on premium as extra premiums cannot be charged only based on the unfavourable claims experience in the said Policy. The insured and insurer has entered into a contract at the time of first year of policy and all the terms and conditions has been decided at that time only. The contention of insurer for seeking extra premium without increase or decrease in premium for the entire portfolio and excluding diseases which was originally included is not justified. In case of Mahesh , Renewal of a medical claim insurance policy cannot be refused, despite timely payment of the renewal premium, on the ground that continuance of the cover would become more onerous or burdensome for the insurer due to the insured contracting a covered disease during the period of the existing policy. In case of Suresh , the insurer may refuse renewal, even in cases where the insured has an option to renew the policy on payment of the renewal premium in time, on the grounds, such as, misrepresentation, fraud or non-disclosure of material facts that existed at the inception of the contract and would have vitiated the insurance of the cover at its inception or non-fulfillment of obligations on the part of the insured or any other ground on which the performance of the promise under the contract is dispensed with or excused under the provisions of the Indian Contract Act or any other law or when the insurer has stopped doing business. But in the given case of Mr. Suresh, there was no mention of misrepresentation.