Gujarat State Commission Holds National Insurance Co. Liable For Wrongful Repudiation Of Claim Without Proof Of Prior Existence Of Disease

Brief Facts:

Mr. Ankur Manharbhai Nayak (“Complainant”) held a mediclaim policy of National Insurance Company Limited (“Insurance Company”) for the duration spanning from 22.08.2014 to 21.08.2015. Within the policy's validity period, the Complainant experienced a stomachache and was later admitted to Dr Moghabhai Hospital (“Hospital”). Subsequently, the Complainant incurred a total expenditure of Rs. 28,196/- for the medical treatment in the hospital. Following the hospitalization, the Complainant duly informed the insurance company about the incurred expenses and submitted all pertinent documents seeking reimbursement of the claim. However, the insurance company remained silent and didn't provide any response to the claim. Faced with this non-responsive stance of the insurance company, the Complainant approached the District Consumer Disputes Redressal Commission, Navsari, Gujarat (“District Commission”) and filed a consumer complaint against the insurance company. The insurance company argued that at the time of the purchase of the policy, the Complainant wasn't informed about the pre-existing medical condition of Pancreatitis. The insurance company contended that this was a violation of the insurance policy.

The District Commission held that the insurance company failed to substantiate the claim that the Complainant was suffering from pre-existing disease. Thereafter, the District Commission held that repudiation of the claim by the insurance company was arbitrary and improper. Consequently, it directed the insurance company to pay a sum of Rs. 28,196/- to the Complainant for medical expenses incurred during the treatment.

Subsequently, the insurance company appealed the decision of the District Commission to the Gujarat State Consumer Disputes Redressal Commission (“State Commission”).

The insurance company argued that the Complainant purchased the policy in 2013, and the discharge summary from the Surat Institute of Digestive Sciences (“SIDS”) indicated that the Complainant had a 'history' of Pancreatitis in 2012. Relying on this information, the insurance company contended that Pancreatitis was a pre-existing disease, and as per policy clause 4.1, the Complainant was entitled to a claim only after completing 36 months of the policy. The appellant justified the repudiation by referencing the certificate from SIDS, stating that the 'history of Pancreatitis' is based on information provided by a family member at the time of admission.

Observations by the Commission:

The State Commission noted that after treatment at Dr. Moghabhai's hospital, the Complainant was advised to be transferred to SIDS for further treatment. He was admitted to SIDS for treatment of 'Pancreatitis' in 2015 where he incurred an expenditure of Rs. 1,32,872/-. The State Commission noted that, although the Complainant was receiving treatment for the disease in 2015, the insurance company failed to provide substantial evidence to suggest that the Complainant was suffering from the disease in 2012, at the time of purchase of the insurance policy. As a result, the State Commission rejected the contentions laid down by the insurance company.

Therefore, the State Commission upheld the decision of the District Commission and directed the insurance company to pay Rs. 28,196/- to the Complainant for the medical expenses incurred by him.