Rejection Of Claim Within Policy Waiting Period Not Deficiency In Service: Uttarakhand State Commission Allows Appeal By Universal Sompo General Insurance
The Uttarakhand State Commission, presided by Ms. Kumkum Rani and Mr. B.S. Manral held that an insurer's rejection of the claim due to the applicable waiting period under the policy does not constitute a deficiency in service.
Brief Facts of the Case
The complainant obtained a policy with a sum assured of Rs. 2,00,000 from Universal Sompo General Insurance for himself, his spouse, and the children. His spouse underwent a surgical operation which cost him a total of Rs. 1,07,650 for the treatment and Rs. 30,000 for transport. The complainant submitted all the required documents such as medical to the insurance company and subsequently to Karnataka Bank. However, the complainant was informed that his claim was not acceptable. Hence, he lodged a complaint with the District Commission.The District Commission allowed the complaint and directed the insurer to pay Rs. 1,06,931 along with interest @6% p.a. and litigation charges of Rs. 5,000. The complaint against the bank was dismissed. As a result, the insurer appealed before the State Commission of Uttarakhand.
Contentions of the Insurer
The insurer argued that the complainant's claim was rejected, citing a policy exclusion for hospitalization expenses during the first year for myomectomy and hysterectomy. It was contended that the insured failed to disclose any existing ailments in the proposal form, which was a misrepresentation. The insured had a laparoscopic hysterectomy, which is subject to a one-year waiting period. The insurer claimed that the complaint was made with ill intent and that the rejection was in line with the policy terms.
Observations by the State Commission
The State Commission noted that the insurer had disallowed the claim on the grounds of the one year waiting period specified in the policy for hysterectomy. The policy provided that hospitalization costs in relation to specific operations like hysterectomy were not met during the first year unless the insured continuously had coverage by the same or another insurer. The complainant did not submit proof of prior insurance or continuous coverage. The State Commission concluded that there was no deficiency in service by the insurer. It held that the District Commission's decision lacked proper reasoning and was passed without due consideration of the policy terms. The appeal was allowed, and the District Commission's order was set aside.
Case Title: Universal Sompo General Insurance Company Limited Vs. Sh. Sachin Gupta
Case Number: F.A. No. 93/2020