HC refuses to stay circular on mediclaim premium, asks insurance firms to respond to plea against it

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New Delhi, Apr 5 (PTI) The Delhi High Court Monday refused to stay the February 21 circular of General Insurance Public Sector Association (GIPSA) by which mediclaim premium of serving and retired employees of four PSU insurance companies have been increased.

The high court, however, sought response of the Centre and GIPSA and four PSU insurance companies on a plea challenging the circular increasing the existing premium by loading at 47.75 per cent in existing mediclaim premium. The circular has come into effect from April 1.

Justice Prathiba M Singh issued notice to the Centre, GIPSA, National Insurance Company Limited, New India Insurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited on a plea by Bhartiya Bima Mahasangh, an association of employees working with the four insurance firms and Life Insurance Corporation of India (LIC).

The high court listed the matter for further hearing on August 19 and declined to stay the implementation of circular at this stage.

The petition said the four insurance companies have increased the premium rate for mediclaim policy for the employees with effect from April 1 and added that if the increased premium rate is not stayed, they will have to pay very huge amount.

It said that GIPSA, which is an association created by the four public sector insurance companies, has illegally and arbitrarily increased the existing premium by loading at 47.75 per cent in existing mediclaim premium.

It claimed that the increase in premium rate is not illegal and arbitrary but also discriminatory as the LIC has not increased any percentage in the premium in respect of their employees and maintained the existing rate of premium without any change.

The plea said the service condition of the employees of the four public sector insurance companies are similar to that of LIC, therefore, GIPSA cannot formulate a policy which opposes the public policy.

The charging the premium for providing mediclaim by these insurance companies which is almost double of what is charged by LIC is violative of Article 14 (Right to equality) of the Constitution, it said.

It said that to protect health of the employees is one of the basic condition of the service and that cannot be obliterated in any manner and added that the petitioner association has sent various representation to the respondents for revoking of the circular but they have not taken any decision in this regard. PTI SKV SKV RKS RKS