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Has ICICI Prudential Life Taken To Fake Doctors Prescriptions To Avoid Paying Out Claims?

So Manoj Nagpal highlights a consumer forum case in which:

  • Mihan Kisku takes policies worth Rs. 13 lakh from ICICI Pru Life in August 2008
  • He dies of a heart failure in October 2008 (RIP)
  • In September 2009 – note: ONE YEAR after Mr. Kisku’s death – ICICI Pru Life refuses to pay, saying “material information was not disclosed”. They say he didn’t tell them he had blood pressure problems.
  • His wife took the case to the district consumer forum, where she won and was awarded the full 13 lakh plus 3 lakh compensation. On 31 Jan 2012, more than three  years after Mr. Kisku’s death. ICICI tried more stunts here, claiming that Mr. Kisku didn’t provide the right age proof, but was overruled.
  • ICICI then appealed to the state forum which decided, after THREE YEARs in Feb 2015, that ICICI needs to pay.
  • ICICI Pru Life then took this to the National Commission, which has again ruled in Ms. Kisku’s favour.

And what the judge says in the report is: To avoid paying up, ICICI Prudential is using an unreliable ‘prescription’ from a random doctor, who claims to have treated Mr. Kisku for hypertension (high blood pressure).

9. In order to substantiate its case that the petitioner was actually suffering from high blood pressure and hyper-acidity, the insurance company has relied upon the prescription purporting to be issued by one Dr. J.B. Ghosh, DHMS (Hons.) to one Mihan Kisku on 25-08-2005, 10-10-2006 and 21-03-2007. The petitioner company also relied upon a certificate purporting to be issued by         Dr. J.B. Ghosh stating therein that Mihan Kisku aged about 40 years was under his treatment from 25-06-2005 to 21-03-2007 as he was suffering from hyper tension and hyper acidity.

10.    Admittedly, the insurance company has not examined either       Dr. J.B. Ghosh or the investigator who collected the aforesaid document from Dr. Ghosh. In our opinion, in order to prove the case set up by it, it was incumbent upon the insurance company to file affidavit either of    Dr. Ghosh or at least of the investigator who allegedly collected the aforesaid prescription from him. That having not been done, it would be difficult to say that the insurance company has been able to discharge the onus placed on it to prove that the insured had suppressed the material information with respect to the state of his health, while taking the insurance cover.

11.    More importantly, we fail to appreciate how the copies of prescriptions which Dr. J.B. Ghosh allegedly issued to the insured could have been in possession of Dr. Ghosh after 3-4 years of having been issued to the patient. The prescription purporting to be issued by          Dr. J. B. Ghosh which are hand written and not typed or computer typed prescriptions. They are supposed to be in possession of the patient and not in possession of the doctor who issued them. There is no explanation from the insurance company as to how the aforesaid documents came to be possessed by Dr. J.B. Ghosh till 16-08-2009 when a certificate was issued by him certifying that Mr. Mihan Kisku was under his treatment from 25-06-2005 to 21-03-2007. This is yet another reason, for which we would not like to rely upon the aforesaid documents in order to deny the claim preferred by the complainant.

Oh wait. Let me see. We don’t want to pay this claim, so let’s find a pliant doctor, tell him to handwrite a prescription dated in the past, and just take that to the consumer court as proof. They did not even bring the doc as a witness, or even an affidavit from him! And they found the prescription with the doctor, which is usually with the patient.

Essentially, the judge questions the reliability of the prescription, on whose basis the claim was denied. It appears, looking from the above, that the document was a fake one and it’s very unlikely that the officials of ICICI Pru Life were unaware of these being fake.

Why isn’t the consumer forum getting contempt and fraud charges on ICICI Prudential Life and charging them with 100 cr. fines? Every such incident should attract a Rs. 100 crore fine – if you attempt to forge a document to bolster your case, your executives will go to jail and the company will pay a fine of Rs. 100 crores. Yes, that will wipe out its capital, and that’s how it should be.

And, Goodness: SEVEN YEARS.

ICICI Prudential and the consumer forums made a widow wait seven years to get her money, and she doesn’t even get any interest. If ICICI had sent aside the money and placed it in a deposit at 10% (in 2008 those were the rates) the money would have doubled till now and they can just pay her out of the interest.

This is unfair. At the very least, the judgement should have given her 18% interest till the money is paid, just to make such cases more expensive on delays.

And making a widow wait seven years is just bad faith. I will personally avoid taking an insurance policy from them. If I die, who knows, they might make my family run around courts with some other kind of fake document.

Further Notes:

  • The first judgement, in 2013 (five years after the incident) is here at the Burdhwan district consumer court. The Judge mentions here too about how ICICI Pru Life tries to “harass” the claimant. 
  • The next judgement is from the State Consumer Court in Feb 2015, where it’s clear that the judges thought the evidence of the doctor’s prescription was very shady.
  • There are two basic points: ICICI Pru Life had real proof of the person’s age (the PAN card) and decided to question claim on another age proof anyway. This is bad faith. 
  • The second point is that they had no real proof of the doctor’s prescriptions, which cannot be explained in any legal way. And all courts have noticed that having “hypertension” or “hyperacidity” and visiting a doctor 4 times in three years is not proof enough to deny a claim.
  • I have been called by ICICI Pru’s actuarial team who have promised a full statement which I will produce verbatim. Only after that call did I read the earlier judgements. In that call, it was clear to me that:
    • They thought this was a case of fraud but couldn’t prove it
    • They decided to play God and instead of paying up after the first judgement, decided to fight it all the way possible so that they could delay the claim. This is my belief and I said so on the call, that this is pure bad faith. 
    • They said they paid 9% interest along with the amount so it’s at least some justice.
  • When ICICI’s statement comes I will paste it here. I encourage you to read though it and make your personal views clear too, and I’ll place my comments. 
  • Arun Jayant says:

    Wow. I’m speechless. IRDA, what the hell are you doing? Step in right away, and file a INR 1000 Crore fine on this Goliath. This should deter the other monsters out there.

  • Deepak Honnalli says:

    Totally agree. I have heard a lot of such malpractices from them. As you say, for any such fraud, the perpetrator should be punished heftily.

  • Vamsy says:

    On the contrary however, I feel that someone who is seriously ill takes an insurance policy to claim the benefits only two months later cannot be said to be being completely truthful. Insurance business is based on mutual faith and I feel that the person insured might possibly did not act in good faith. But law is on the side of the unfortunate widow.

    • Vamsy, if he is seriously ill, it should have been detected in the insurance policy. If they aren’t even able to bring the doctor to sign an affidavit, and use a fake prescription (it seems fake obviously because the doc had it – which doc keeps a prescription?), then they are absolutely wrong.
      It is very likely that someone was all healthy and they took insurance and died after two months. In a large country such things will happen, and will definitely happen when you are in scale. It doesn’t mean an insurance company should harass such cases for SEVEN YEARS! The onus of proof of “not good faith” rests on the insurer, who have not been able to prove at all that he was wrong. In fact by forging the prescription they are quite literally admitting that their own medical tests were perfectly fine and they had no other proof of his having been ill or something like that.
      The company should be fined 1000x of the amount and paid half ot the widow and half to the government. A few such large fines and they will suddenly stop such harassment (by fake stuff).

    • Vinayaka says:

      Insurance companies are large corporations with a lot of resources on hand (lawyers / doctors etc). They have various mechanisms to detect fraud. No one is forcing them to sell insurance to anyone.
      On the other hand an ordinary person needs to be extremely clever and resourceful to fraud a Insurance company. They do make you take lot of medical tests before they write the insurance.

  • Lakshmi pathy says:

    Thanks for bringing to our notice.

  • Suresh KP says:

    I agree with your views Deepak. Such insurance companies should be punished with hefty fine by IRDA who are wasting a widow who had big loss of her husband and this pain for 7 years. ICICI Pru would have kept this money in bank FD and would have paid interest and retained capital after 7 years.

  • Sagar says:

    I have taken term insurance from ICICI pru for a large sum. This news started worrying me.

  • Bekxy Kuriakose says:

    Deepak
    Pls keep highlighting such cases. Advisors and financial planners say one should cover oneself and family adequately through health insurance. But when one actually goes to file a health claim, the amount of harassment and rejections one faces is not funny.
    In such a scenario am not sure if one should even apply for health insurance when in all likelihood insurance companies can take years to make payout or reject claims on flimsy grounds?

    • Hi Bekxy, Thanks. I think this is a serious concern and we should actually be hauling up these companies for rejections on flimsy grounds, and harassment is definitely not acceptable!
      Need to create more awareness about this but the courts taking so much time is also severe injustice.
      Thanks,
      Deepak

  • Gaurav says:

    These people are shameless and making a mockery of the entire system

  • Sreekanth Yelicherla says:

    No wonder that ICICI is always a 2nd grade company.

  • Vinayaka says:

    I have been very disturbed by reading this article.
    I felt ICICI was unethical about 10 years ago and I closed all my related accounts (ICIC Bank / Stocks etc).
    After reading this I am telling anyone and everyone I meet to stay away from ICICI.
    Fraud by an Insurance company is the worst kind of fraud in my opinion.
    For most things when you pay your hard earned money you get something. (eg: TV / clothes / etc It may be adultrated / lower quality etc but it is still something).
    When you pay for insurance you get a piece of paper. If they do such fraud and don’t keep their promise – what is the point of insurance?

  • kumar says:

    I would like to understand the reason for encouraging FDI investment in this sector. The concerned parties say that the new investment will bring new ideas.
    The only idea [in my opinion] that is relevant in the insurance field is how a company can deny benefits to its policyholders, be it medical, or life. All the profits depend on mostly this single issue.
    So, what sort of international expertise can the new investment bring? creative or entertaining denials?

  • Kamal Garg says:

    Why soem body doesn’t create a hate ICICIPruLife site so that people who suffer from such callous attitude by the insurer can create a negative buzz against the Company and create mass awareness among citizens/consumers.

  • Arun Jayant says:

    Deepak,
    What’s your take on staying away from ICICI Bank and ICICI Mutual Fund based on the bad Karma generated by ICICI Pru Life? All of them are separate entities right? Does it make sense to avoid the ICICI umbrella altogether? What if tomorrow somebody unearths something bad about HDFC Standard Life? Will I have to say by bye to Mr. Prashant Jain?

    • Arey no unless there is contagion of such principles, I would not go to that extreme….Nothing right now says their lawyers and execs have infected the full ICICI Brand. And I hope Chanda Kochchar won’t stand for this kind of behaviour spreading onward…

  • Manu says:

    Really horrified to read this article. ICICI as an institution (regardless of bank/ insurance co) continues to plumb to new lows. In b-school we all wanted to avoid ICICI as an employer as it treats its employees badly. My cousin used to cry on the phone to me and later moved out as soon as he could. One thing I don’t understand, why can’t a criminal case be filed against ICICI Pru for intentionally misrepresenting facts/ forgery and intimidation? Or is it that the widow, quite understandbly, has no intention of fighting this any more.

  • Bharani says:

    I’ve worked in Insurance industry in IT/consulting for 13 years, and this is what I can say – Indian industry maturity in terms of claims settlement/repudiation can be adjusted to 1980s-US insurance, where these practices were rampant (see Erin Brokovich, Rainmaker). Right now, Indian insurers are focusing on product design, differentiation through features and flexibility, agent inducement (better commissions, holidays…), and technology enablement (SMAC is a fancy word we use – stands for Social, Mobile, Analytics, Cloud).
    Make no mistake, it will take another 12-15 years when industry comes out of this claims settlement/repudiation mess. The key things required for this transformative journey are:
    1. Judiciary system revamp – right now, it favors powerful corporates; individuals stand no chance in a court of law, forget ombudsman. In this case, court ruled in favor of widow, but justice served late is justice denied.
    2. Transparency – IRDA does so many things, but literally nothing in claims area – settlement ratio is a joke unless it is segmented – total amount disbursed instead of absolute count, amount per LOB etc.
    3. Claim manuals – people should look at the claim manuals of companies in their current state – do not be surprised if someone finds clauses like ‘approve 70% of the total amount on an average over a period of …’ even in this information age.

  • Senthil Nathan says:

    Thanks for the story, Deepak. Thankfully I dont have my life insurance with them…