The Union Ministry of Finance today told the Bombay High Court that it cannot give blanket directions to insurance companies to award a fixed amount of compensation to policy-holders as there is a regulatory body for the sector.
The court has directed the Insurance Regulatory and Development Authority (IRDA) to file its reply by June 6.
A division bench of Chief Justice Mohit Shah and Justice D G Karnik was hearing a PIL filed by a social activist Gaurang Damani pointing out the hardships being faced by medi-claim policy holders.
According to the petition, problems began in July 2010 after public sector insurance companies, acting through third party administrators (TPAs), suddenly stopped offering cashless medi-claim benefits to consumers in top hospitals in the metros.
“The nature of this dispute cannot be resolved by the High Court. Blanket directions cannot be given to hospitals or an insurer of the TPA to permanently compensate the policy holder for any and every bill he produces,” the affidavit filed by Jitendra Meha, under secretary in Ministry of Finance stated.
It further claimed that the IRDA should decide on matters related to the sector.
“IRDA’s powers and functions include protection of the interests of the policy-holders, settlement of insurance claims and so on,” the affidavit said.
The ministry has suggested that the issue be resolved by a civil court. “The issue requires examination of witnesses, affidavits and an elaborate trial. The matter may thus be relegated to a civil court,” it said.