Insurance Claims Cannot Be Denied For Pre-Existing Ailments Without Prior Medical Tests: Delhi State Commission

Brief background:

The complainant took an Overseas Mediclaim Insurance policy from Oriental Insurance Co. ltd. Thereafter, the complainant went to Singapore to visit her family where she faced some complications in the heart and had to undergo a procedure. It is stated that son of the complainant immediately informed the insurance company and requested for cashless payment. The company, however, insisted that the complainant make payment first and apply for a reimbursement of all medical expenses later. Subsequently, the claim form was filed with all relevant documents by the complainant for the said reimbursement. A legal notice was also sent demanding the payment but no adequate response was received by the company. Hence, a complaint was filed before the consumer forum praying for appropriate compensation.

The District Commission dismissed the complaint of the complainant and held in favour of the insurance company. The said decision came to be challenged by the complainant before the Delhi State Commission.

The Company argued that the claim has been rightly repudiated since the operation was done on account of a pre-existing disease. The company relied on clause 11 of the policy which did not cover insurance claims for complications arising out of pre-existing diseases. It was further argued that even if the complainant was unaware of the said pre-existing condition, the claim would be denied. An opinion of a medical expert stating the existence of such pre-existing ailments was also placed on record by the company.

The complainant, on the other hand, argued that no medical examination of the complainant was done at the time of taking the policy. Observations made by the doctor were also denied since it was not supported by an affidavit.

Observations:

The bench relied on the judgment in Pradeep Kumar Garg vs National Insurance Co. ltd. FA 482/2005 and observed that until a person is hospitalised for a disease closer to the obtaining of an insurance policy or any disease for which he has never been hospitalised, that disease cannot be treated as pre-existing disease.

Reliance was also placed on the decision in Sunil Kumar Sharma vs. TATA AIG life insurance co. & ors. [Revision petition 3557 of 2013]. In this case, an insurance policy was given to a 66 year old person without any preliminary medical examination. The National Commission observed that denial of claim on account of lifestyle diseases such as diabetes and hypertension was not justified.

The bench observed that the insurance claim of the complainant has also been repudiated on the ground of common lifestyle diseases like Hypertension, diabetes and Hypercholesterolemia. Since no medical tests were conducted by the company before issuing the policy, the company should have honoured the claim and could not have repudiated it on the ground of pre-existing diseases. Hence, it was held that there was a deficiency in service on the part of the insurance company.

The following reliefs were granted:

1. Rs. 13,46,735/- along with 6% interest p.a. was directed to be paid by the company.
2. Rs. 1,00,000/- was also ordered for mental agony and harassment.
3. Litigation costs amounting to Rs. 50,000/-.

Thus, the decision of the district commission was set aside and the appeal was allowed.

Name of the case: Surilla Mathur vs M/s Oriental Insurance Co. ltd

Case number: First Appeal 26/2015

Date of decision: 02.12.2024

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