Gurgaon District Commission Holds AEGON & Religare Life Insurance Co Liable For Wrongfully Repudiating Genuine Claim

Brief Facts:

The Complainant opted for an insurance policy from AEGON & Religare Life Insurance Company Limited (“Insurance Company”) with maturity on September 2, 2025. This policy provided an annual assured cover amount of Rs. 4,90,000/-. The Complainant consistently paid all due premiums on time. Later, the Complainant was admitted to Medanta Hospital in Gurugram, suffering from backache, lower limb swelling, and general weakness. After undergoing several tests, she was diagnosed with anaemia and incurred medical expenses amounting to Rs. 35,898/-. Again, the Complainant experienced fever and severe abdominal pain which led to her admission to Kalyani Hospital in Gurugram where she accrued medical expenses totalling Rs. 74,648/-.

Despite submitting claims for her medical expenses from both hospitalizations, the Complainant received only Rs. 3000/- from the Insurance Company. The Insurance Company neither responded to the claims nor provided reasons for not clearing them. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Gurgaon, Haryana (“District Commission”) and filed a consumer complaint against the Insurance Company.

The Insurance Company, in its defence, stated that the claims were pending because the Complainant did not provide the necessary documents despite regular reminders. It argued that without these documents, it could not process and verify the claims.

Observations by the District Commission:

The District Commission held that all requisite documents were submitted by the Complainant. These included the discharge summary, medical bills, receipts, and health claim forms from both Medanta and Kalyani Hospital. The District Commission also observed that the Insurance Company acknowledged receipt of these documents. It held that the Insurance Company failed to present any evidence to counter the validity of these documents.

Therefore, the District Commission held that the Insurance Company could not legitimately claim it didn't receive the necessary documents for processing the claims. It held that the Insurance Company took false and frivolous positions to avoid settling the claims, which amounted to creating a deceptive façade before the District Commission.

The District Commission held that the Insurance Company was liable for deficiency in service. Consequently, it directed the Insurance Company to reimburse the medical claims totalling Rs. 1,10,546/- to the Complainant along with 9% annual interest. Additionally, the District Commission imposed a penalty of Rs. 1,00,000/- as exemplary compensation for the intentional and willful deficiency in service that caused significant harassment and mental agony to the Complainant. The Insurance Company was also ordered to pay Rs. 22,000/- towards litigation expenses.

Case Title: Kiran Malhotra vs AEGON & Religare Life Insurance Company Limited

Case Number: 346 of 2023

Date of Decision: 14.06.2024