Insurance Company Can't Harass Insured By Demanding Unnecessary Documents, Chandigarh District Commission Holds TATA AIG General Health Liable

Brief Facts:

The Complainant procured a "Health Companion" life insurance policy, a Health Insurance Plan, from the TATA AIG General Health Insurance Company Ltd (“Insurance Company”), where up to three claims for critical illness could be made. Allegedly assured by the insurance company's agent of coverage for life-threatening diseases and promised a full refund for incurred expenses in case of illness, he paid a premium of Rs.6176/- for a sum assured of Rs.3.00 lakhs. Upon experiencing sudden severe pain in his right leg, he sought medical attention at Lifeline Super Specialty Hospital and informed the insurance company via its official portal. Subsequently, he incurred Rs.1,95,000/- in treatment expenses, submitted a claim for reimbursement and provided all requisite documents. The Complainant alleged that the insurance company harassed him by requesting additional documents and the original policy, despite submission. Further, he claimed that the insurance company unjustly rejected the claim on false grounds. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company argued that upon receipt of the claim intimation, it engaged Dr Biswendu Bardhan of M/s ICG Services to investigate. The investigating doctor, after examining hospital records and stating discrepancies in dates, events, and medical consultations, held that material facts were concealed by both the Complainant and hospital authorities. As a result, it argued that it was impossible to decide based on merit due to the absence of pertinent information and documents from the Complainant.

Observations by the District Commission:

The District Commission noted that the Complainant was covered under the policy when he underwent treatment for acute right limb vascular occlusion and incurred expenses of Rs.1,95,000/-. Additionally, records confirmed his admission to the hospital on 09.04.2019 and subsequent discharge on 11.04.2019. The Complainant diligently submitted all relevant documents received from the hospital to the insurance company to facilitate his claim. Even the Investigating Officer appointed by the insurance company, upon visiting the hospital and reviewing medical records, stated in a report that the Complainant received treatment for acute right limb vascular occlusion. The District Commission held that it was incumbent upon the insurance company and its investigating officers to collect any additional pre- and post-OPD consultations if deemed necessary, rather than subjecting the Complainant to undue harassment by demanding extraneous documents that may not be in his possession.

The District Commission held that insurance companies often employ enticing strategies to attract customers during policy sales but resort to various tactics to evade claim payments when needed. It referred to the decision of the Supreme Court in Dharmendra Goel Vs. Oriental Insurance Co. Ltd. [III (2008) CPJ 63 (SC)], where it was held that insurance companies, being in a position of dominance, frequently engage in unreasonable practices, disowning previously accepted figures when called upon to fulfil compensation obligations. Such a 'take it or leave it' stance is not only legally unsound but also ethically reprehensible.

Therefore, the District Commission held that the insurance company is liable for unjustly and unlawfully repudiating the claim made under the policy. It directed the insurance company to reimburse the Complainant Rs. 1,95,000/- for Mediclaim, along with interest at 9% per annum.

Case Title: Amit Gautam vs TATA AIG General Health Insurance Company Ltd and Anr.

Case Number: CC. No. 28/2020

Advocate for the Complainant: Shri Atul Saini for Shri Rahul Bedi

Advocate for the Respondent: Shri R.C. Gupta and Shri Sudhir Gupta

Date of Order: June 4^th, 2024