Chhattisgarh State Commission Holds LIC Liable For Wrongful Repudiation Of Claim Based On Unconnected Prior Medical History

Brief Facts:

Ms Premlata Agrawal's (“Complainant”) husband obtained a Health Plus Policy from Life Insurance Corporation (“LIC”), for himself and the Complainant. During the sustenance of the Policy, the Complainant fell ill due to some small intestinal issues, and she was admitted to the Digestive Health Institute of Mumbai (“Hospital”) for an operation. She incurred an expenditure of Rs. 3,00,323/- for the treatment. Under this, she submitted a claim to LIC. However, LIC repudiated it based on the fact that she concealed her laparoscopy and laparotomy done in the years 1986 and 1990, respectively. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Bilaspur, Chhattisgarh (“District Commission”).

The Complainant alleged that the aforementioned information was communicated to LIC's agent, who did not object to it. Further, the current problem did not pertain to the older illness of the Complainant. The District Commission partly allowed the complaint and directed LIC to disburse Rs. 3,00,000/- to the Complaint along with Rs. 1,00,000/- compensation for mental agony and Rs. 5,000/- litigation costs.

Dissatisfied with the order of the District Commission, LIC filed an appeal to the State Consumer Disputes Redressal Commission, Chhattisgarh (“State Commission”).

Observations of the Commission:

The State Commission reviewed the 'Claim Rejection Letter' from LIC, where it cited the Complainant's history of primary amenorrhea due to Turner mosaic syndrome as grounds for rejection. The rejection clause stated that pre-existing illnesses were not covered regardless of prior medical treatment or advice. The Complainant underwent laparoscopic banded gastric bypass for metabolic syndrome, which LIC refused to cover citing the pre-existing condition clause. The State Commission found that while the Complainant had a previous medical history, LIC failed to specify which question in the insurance proposal was answered falsely, as the proposal was made 22 years after the mentioned treatments. The State Commission also concluded that the gastric bypass surgery in 2017 was unrelated to the treatments in 1986 and 1990, which were for primary amenorrhea due to Turner syndrome and not for metabolic issues.

Therefore, LIC was deemed liable to pay the claim, as the rejection was found to be based on insufficient grounds. The appeal was dismissed, affirming the District Commission's decision, and no costs were awarded.