The Punjab and Haryana High Court issued warning against National Insurance Company (NICL) for attempting to back out from its contractual obligation of providing medical reimbursement to more than 8,00,000 beneficiaries of the Bhai Ghanya Sehat Sewa Scheme under the sponsorship of Bhai Ghanya Trust.
The trust was set up by the Punjab government for implementing the healthcare scheme for the poor in the state.
The court has also ordered NICL to ensure that the medical reimbursement services are not disrupted. The matter has been adjourned to May 27, 2008 as the counsel for NICL sought time.
The trust had appointed NICL after it emerged as the lowest bidder in a process for selecting an insurance company for providing health insurance cover and paid Rs 24 crore as premium to the insurer.
NICL had quoted an insurance premium of Rs 1,291 per main member. Meanwhile, the insurer already faced medi-claim reimbursement up to Rs 20 crore. Fearing heavy losses, NICL issued a termination notice on April 8, 2009, to the trust.
The group medi-claim policy is valid till September 2009.
Besides, NICL also issued a demand notice asking the trust to pay premium over and the amount earlier agreed at the time of execution of the service level agreement.
The trust pleaded that it had paid the premium as per the contractual obligation and the rate quoted by NICL during the bidding process.