Bangalore District Commission Holds Niva Bupa Health Insurance Co. Liable For Wrongful Repudiation Of Valid Claim

Brief Facts:

Mr John Jacob (Complainant), along with his wife and children, held a health insurance policy issued by Niva Bupa Health Insurance Co. Ltd. (“Insurance Company”). The Complainant's wife, Mrs Princy John, was admitted to Bangalore Baptist Hospital for Acute Exacerbation of Reactive Airway Disease. The Complainant sought a cashless claim as per the policy terms, but the Insurance Company rejected the request through a disapproval letter. The reason cited was an incorrect diagnosis of 'sleep disorders' for denial. The Insurance Company advised the Complainant to submit the claim documents for reimbursement instead.

Following the discharge, the Complainant submitted the necessary documents for reimbursement. However, the Insurance Company rejected the claim citing two primary reasons. First, it claimed that diabetes was a pre-existing condition under the policy, and any treatment related to it was not covered until the completion of a 36-month waiting period from the policy's inception. Second, it contended that the hospitalization was primarily for 'diagnostic and evaluation purposes' which was excluded under Clause 6.4 of the policy.

The Complainant subsequently provided additional documents, including a medical certificate, clarifying that his wife was admitted solely for acute exacerbation of reactive airway disease and not for diabetes evaluation. Despite this, the Insurance Company upheld its rejection. Feeling aggrieved, the Complainant filed a consumer complaint before the Additional District Consumer Disputes Redressal Commission-II, Bangalore Urban (“District Commission”).

Observations by the District Commission:

The District Commission noted that the burden was upon the Insurance Company to demonstrate that the treatment taken by the Complainant's wife was related to a pre-existing disease, i.e., diabetes. It held that mere assertions in the written version cannot be treated as evidence. Further, the District Commission referred to the letter issued by one Dr. Sajin Sunny Mathew and held the Complainant successfully proved deficiency of service and unfair trade practice on the part of the Insurance Company.

The District Commission held that:

“So, looking to Ex.P4 stated supra coupled with other documentary evidence on record produced by the complainant particularly Ex.P6 Discharge Summary and also looking to facts and circumstances of the case and in view of the principles stated in the decision relied on by Advocate for the complainant, we are of the considered view that the complainant has proved that there is a deficiency of service and unfair trade practice on the part of OPs since OPs have rejected the complainant's claim without proper and acceptable reasons.”

Consequently, the District Commission directed the Insurance Company to pay the principal amount of Rs. 53,480/-. It also directed the Insurance Company to pay Rs. 5,000/- as compensation for deficiency in service and mental agony, and Rs. 5,000/- towards litigation costs.

Case Title: John Jacob vs Niva Bupa Health Insurance Co. Ltd. and Ors.

Case Number: Consumer Complaint No. 297/2024

Advocate for the Complainant: George Philip

Advocate for the Respondent: Ashoka. E

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